December 2006 Looking Ahead

Published October 24, 2006

Americans purchased more than one-quarter of a million hybrid cars and trucks in 2006. So what will hybrid sales look like in 2007? Analysts' forecasts vary widely, projecting sales growth as low as 19% and as high as 86%. We're not sure which of those forecasts is the right one, but we're optimistic about next year's hybrid sales for two reasons:

Toyota is optimistic. At the moment at least, Toyota drives the hybrid market. Their models accounted for more than three-quarters of all hybrid sales in 2006. In an interview last month with Automotive News, Toyota President Katsuaki Watanabe estimated 2007 North American sales at 300,000 units, roughly a 50% increase from 2006. Market analysts (including us) can predict whatever sales number they want for next year, but when Toyota's President provides sales guidance, it's the real deal.

The number of hybrid offerings will expand dramatically. In the next 12 months, the number of vehicles offering hybrid powertrains will double (planned launches are shown in the table below.) The result will be more choice for consumers interested in buying hybrids. While some of the new vehicles (like the Mazda Tribute) are essentially just rebadged versions of existing hybrid models, other new models expand the hybrid footprint into new vehicle classes. Pay close attention to sales of the hybridized Chevy Tahoe, GMC Yukon, Cadillac Escalade, and Dodge Durango. Unlike previous mild-hybrid truck offerings, these four are true full-hybrids, employing the dual-mode hybrid system developed by the GM/DaimlerChrysler/BMW alliance. We have our doubts about how enthusiastic full-sized SUV buyers will be about hybrid technology. But a half a million Americans bought full-sized SUVs last year. Even if a modest fraction of them opted for a hybrid version, it could boost overall hybrid sales considerably.