Toyota hybrid sales increase as petrol prices soar – TopAuto
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Monday / 4 July 2022
HomeNewsToyota hybrid sales increase as petrol prices soar

Toyota hybrid sales increase as petrol prices soar

When Ian Campbell’s wife got rear-ended in her Honda HR-V last month, the Atlanta couple were thrust back into the new-car market – just as gasoline prices surged to more than $4 a gallon (R15.58 a litre).

After being quoted $6,000 (R87,665) above MSRP on a 2023 Kia Sportage and passing on an optioned-out Hyundai Tucson for $45,000 (R657,488), Campbell and his wife settled on a $36,000 (R525,990) Toyota RAV4 hybrid, sight unseen. He expects to drive it off the lot by Saturday.

“It’s coming by the end of this week, and time is a factor, because she’s driving a rental but insurance isn’t going to pay that forever,” Campbell said by phone. “The mileage with the current gas price was a factor” as well.

At a time of barren dealer lots, soaring gas prices and stingy car discounts, Toyota will likely be king of U.S. new car sales for a second consecutive quarter, according to researcher Cox Automotive.

The Japanese full-line maker of budget compact sedans, mid-market crossovers and Luxury SUVs currently offers 18 hybrid and fuel cell models.

Its brands represent more than half of total hybrid-vehicle sales in the U.S.

Toyota as No. 1

Toyota also has navigated a chip crunch crimping vehicle output more deftly than some of its peers, which helped it oust General Motors as the No. 1 automaker in the U.S. for the last three months of 2021.

Whether that held into the beginning of 2022 will become clearer Friday as most automakers are set to report first-quarter totals.

New-car sales likely dropped 16% to 3.3 million in the first three months of 2022, which would be the second-worst quarter in a decade, according to Cox.

The seasonally adjusted annual rate likely slipped to about 13.2 million new vehicles in March, down from 17.8 million a year earlier, according to the average forecast of eight market researchers.

Toyota has outperformed during the chip crisis because it’s used to operating with lean inventory and has streamlined trim options, said Brian Finkelmeyer, who focuses on inventory management technology at Cox Automotive.

“They’re constantly saying, ‘We’re just going to build the core specs we know consumers are buying,’” Finkelmeyer said. “They make it very difficult for the dealer to order something that’s not a fast mover.”

The semiconductor shortage that’s been choking off vehicle production for more than a year will linger for the rest of 2022, executives and analysts say, while the war in Ukraine has introduced new headaches for the global auto supply chain.

Those wrinkles prompted Cox this week to cut its 2022 forecast for seasonally-adjusted sales to 15.3 million from 16 million.

Subdued Sales Outlook

That compares with new-light vehicle sales of 14.93 million last year, which was a 3.1% gain over 2020, according to the National Automobile Dealers Association.

With inventories remaining tight and prices expected to stay elevated, Cox projects the pace of sales will likely remain subdued.

That dynamic plays to Detroit automakers’ strategy of focusing on higher prices over volume: They killed off entry-level sedans in favor of more-profitable trucks and SUVs with luxury price tags in recent years, while chip shortages have further drained inventory.

As a result, Asian car brands have been gaining in mass-market sales.

In 2021, Ford had the biggest market share for vehicles priced above $50,000 (R730,543), ahead of Mercedes-Benz, according to Cox.

Toyota was the market leader for vehicles under $50,000 (R730,543).

Toyota’s sales last year were buoyed by cars such as the compact Corolla and large Camry sedans.

The RAV4 crossover SUV was the automaker’s top seller despite a sales decline.

While Toyota may have the biggest slice of sales in 2022’s first quarter at 15.6%, Tesla will post the biggest gain, according to Cox.

The EV maker likely expanded its market share 2.2 percentage points over the first quarter of 2021 to 4%.

Hyundai, the next-biggest gainer, is expected to surpass Honda, with 9.7% share.

GM likely suffered the biggest drop – a 1.5 point decline to 14.8% market share, followed by Nissan’s 1.4-point giveback, according to Cox.

GM’s chip supplies are steadily improving, spokesman Jim Cain said.

“We feel pretty confident about our ability to rebuild inventory over time,” Cain said. “We’re rebuilding in the segments that we underbuilt last year.”

GM expects volumes with Toyota to be close, Cain said.

Planting the Seed

Share gains by Tesla and Hyundai, which makes the battery-powered Ioniq 5, reflect Americans’ growing interest in EVs, which has strengthened with the spike in gas prices, said Jessica Caldwell, executive director of insights at Edmunds.

“Most consumers don’t need to know or aren’t necessarily going to seek out the information until something drives them to do so, like high gas prices,” Caldwell said.

“The seed could be planted in peoples’ minds and there could be greater consideration for purchase down the road.”

Mike Sullivan, who owns dealerships selling 13 different brands in the Los Angeles area, said he’s got a longer wait list for hybrids and electric vehicles than combustion-powered cars.

“We’re sold out of everything,” he said by phone. “Plug-in hybrids are becoming more and more relevant.”

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