Japan Hybrid Sales Bypass US

In June, Toyota sold 22,292 Priuses in Japan, while selling only 12,998 units of the Toyota Prius in the US.

Sales of the Prius in Japan, when combined with Honda’s 8,782 sales of the new Honda Insight, were enough for Japan to become the biggest market for gas-electric hybrid cars in the world. June sales of hybrids in the US totaled 26,205 units.

“We’re seeing the right combination of factors in the Japanese market: new product, government incentives, and gas prices in the $4.50 a gallon range,” said Reid Heffner, an alternative transportation analyst at Booz Allen Hamilton, in an interview with HybridCars.com. “Excitement about new hybrid products like the Insight and Prius will eventually subside, but the Japanese government has created the right mix of policy measures—including a tax exemption for hybrids and a substantially higher levy on gasoline than in the US—that give hybrids a durable financial advantage over conventional vehicles.”

US hybrid sales were up in June for the sixth consecutive month, exceeding 3 percent of the new car market. With the Japanese overall annual car market forecast at just below 5 million vehicles, this month’s tally of more than 30,000 hybrid sales means that approximately 8 percent of new car sales in Japan were hybrids in June.

Last month, Yoshiaki Kawano, an analyst at auto consulting company CSM Worldwide in Tokyo, told Reuters, “Tax incentives are definitely boosting purchases.” Customers ordering a Prius in Japan must wait close to seven months for delivery. In order to meet high demand, Toyota moved workers from various factory locations to its Tsutsumi, Aichi facility, which builds the Prius. Additionally, work shifts have implemented overtime in order to produce 50,000 Priuses a month.

Data from R.L. Polk & Co., which tracks new car registrations, reveals that in 2006, Japan sold only one hybrid for every 4.3 sold in the US. In the first two months of 2009, the ratio was cut in half. In June, early reporting of sales figures indicates that Japan is selling more hybrids than the US.

US government policy toward incentives for fuel-efficient cars has almost entirely shifted toward next-generation plug-in cars—not available until at least late 2010—while ignoring hybrids currently on the market and avoiding increased taxes on gasoline.

Tougher efficiency standards, larger investments, and bigger incentives in other Asian countries—most notably South Korea and China—could mean even more competition in the global race to greener cars. The South Korean Presidential Committee on Green Growth announced today that by 2015, automakers will need to increase average new vehicle fuel economy to 40 mpg, affecting 30 percent of vehicles by 2012, ramping up to all cars by 2015. New US fuel economy standards require cars and trucks to average 35.5 mpg by 2016.

SAIC Motor, China’s largest car manufacturer announced today that it will invest $1.7 billion over the next 3-5 years to develop “new energy vehicles”—and more than $300 million to commercialize advanced fuel-efficient cars this year.

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  • Samie

    Interesting but somewhat expected from a country that has limited space and very few natural resources, not talking about their economy but merely their energy needs and the higher costs associated w/ less resources and small land mass. I would say a 1-2 dollar increase in the gas tax would be great in the U.S. but that will not work. Also I worry about socioeconomic differences w/ a higher gas tax…

    The best example I can think of is in the U.S. most hate taxes but love government services or incentives. Example in many towns teachers are being cut b/c of budget problems but for as much outcry from concerned citizens over letting go of teachers very few actually want to raise taxes (temporary) until funds get back to normal to keep teachers in school rooms. We hate taxes so politicians just borrow money to solve problems. This whole cycle is messed up but that is how people think and that’s why we can’t actually raise gasoline prices to meet a more true cost associated with petroleum. In the U.S. we need to change many traditional ways of taxing to create a more stable system but that’s another story…..

    I agree w/ the U.S. policy of stopping most rebates for traditional hybrids but I’m troubled at some of the domestic options for full hybrids. With higher gasoline prices ahead little or no government incentives may not be needed, we will see…

  • Lost Prius to wife

    Samie, I feel your worries about the US socioeconomic differences with a higher gas taxes are well founded. With higher the gas taxes, the poorer consumers will have to spend more of their money just to get to work to make money. This should be incentive to buying a more fuel efficient vehicle. But because of the increased gas cost, they will have less discretionary money to buy a more fuel efficient vehicle. As I have said before, taxes tend to hurt the poor the most. Tax credits are the proper incentive for putting the “carrot in front of the horse”. Although this benefits both the rich and the poor, this benefits the poor more than the rich percentage wise. It also rewards only those that choose to use the credit. Since the government runs off the taxes, we can not just get rid of taxes. And we should not give the exact same credit or incentive when there is a wide range to the improved efficiencies. Therefore, it has to be the right balance of taxes and proper credits to direct us down the right path to less oil dependency. For the Japanese hybrid market to jump to 8%, the Japanese government must have found that “right balance” for Japan. Now will our government be able to do the same?

  • J-Bob

    Personally I think China’s eBike revolution will start making some serious in-roads into the Japanese/US market (150,000 units sold last year, expect that to triple this year). With a lower cost of ownership (in most cases no insurance needed), less space (take anywhere – especially public transit), plus the added health benefits of riding a bike, it makes a considerably strong case (especially in space strapped Japan). Aside from needing a car/truck for family jaunts, towing, or for extreme climates, having an eBike that can go 20-30 mph makes a heck of a lot of sense (even for the senseless).

  • Max Reid

    Great. 30,000 units + from just 2 models.

    Prius’s record in US was 24,000 + sales in 2008 around May month I guess. Looks like the current 22,292 is pretty close. Production of Prius is already increased by 50%, so expect more in the coming months. So in June-2009, 35,000 + units of Prius is sold which is an annualized rate of 400,000.

    So Prius has overtaken Camry and Corolla in Japan for the last 2 months. Hope they allocate more units to US from July onwards.

    Yes, China’s e-bike and e-scooter is also a big revolution with 20 million of them in Chinese roads.

    How come Honda could sell more Insights in Japan, but not in US. Probably they should reduce the price here.

  • dominick36

    Japan has a tendency to keep all their hybrid models in Japan. A perfect example of this is the Estima Hybrid or the equivalent of the American Sienna Van. They have had this model in Japan for at least five years. Through the many years I have been reading comments here, there have been questions and pleas about when there will be a hybrid van in America. The answer is still nowhere. While the Prius and the other two hybrids sold in America are ok for the small family, those who are average american families need a people carrier (van) that is great for their needs.
    So, why can’t this be done?

  • RemyC

    In 2006, 7,667,066 passengers cars were sold in the United States.
    In 2008, 232,993 passenger were sold in Japan.
    So how many hybrids are sold in Japan vs how many hybrids are sold in the US, doesn’t factor much in terms of global climate change figures.
    250,851,833 registered passenger vehicles in the United States in 2006.
    923,000 of these vehicles were imported from Japan.

  • RemyC

    Dominick Mileto makes a great point. Why has there never been a hybrid van introduced on the market. You’d think utility vehicles, those most likely to travel the greatest distances with constant use, at the greatest energy savings, would not be introduced as hybrids.
    There was great hope Toyota would re-introduce its Scion xB as either a hybrid or all electric mini-utility van design, which is what the majority of people who have bought xB’s use it for, flower shops, pizza delivery, computer repair, etc… it’s a vehicle of choice, because it’s fast, easy to park, and good on gas, with large trunk space once the back seats are layed flat. If we were really serious as a country about going green, rather than just perpetuate eco as a fashion statement, we’d have introduce hybrid utility vehicles a long time ago!

  • MellowGuy

    I gave up waiting for a hybrid minivan and bought a hybrid SUV. I don’t need to haul many people, but do appreciate the cargo space of a minivan which is about 40 more cubic feet than the SUV.

    Visually comparing my minivan with my SUV, I noticed that the engine compartment seems much larger than that of the minivan. The SUV has a slightly smaller engine, but it has electric motors and a fairly bulky converter/controller filling up the engine compartment.