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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Truck Sales Surge, Hybrids Fizzle

Cheaper gas may be helping lure some buyers away from the most fuel-efficient vehicles, but market forces are more likely to blame for this reversal of fortune

Jim Gorzelany CTW Features
With gas prices dropping precipitously in late 2014, sales of full-size pickup trucks continued their upward path, while those of fuel-frugal hybrids were headed in the other direction. U.S. new-vehicle buyers purchased 10 percent more pickups this past October than they did over the same 30-day period in 2013, according to statistics compiled by Autodata in Woodcliff Lake, N.J. Meanwhile, sales of the most popular hybrid on the market, the Toyota Prius fell by 13.5 percent, dragging the rest of the segment down with it. “If you were to turn back the clock seven years, Prius was at the height of its game,” says TrueCar president John Krafcik. “Demand was high, inventory was limited and incentives were practically non-existent. Fast-forward to this year: Hybrid popularity is waning, and the country’s love of the full-size pickup truck is remarkable.” According to TrueCar, full-size pickup trucks now top the sales charts in 34 of 50 U.S. states. Among those, the Ford F-Series (soon to be replaced by an all-new version) remains the top dog in 25 states. The top three selling vehicles overall in October were the Ford F-150, Chevrolet Silverado 1500 and the Ram 1500 pickups, in that order. But analysts suggest this reversal of fortune is not entirely driven by the average cost of a gallon of gasoline. For starters, the economy has been on a steady upswing, with pent-up demand among those for whom burly pickup trucks are essential tools of the trade helping to spike sales back to pre-recession levels. “Housing starts and new construction are better predictors of truck sales than gas prices,” Krafcik says. “At this point, it would take a dramatic jump in gas prices to really have an impact on full-size pickup sales.” At that, automakers continue to slap sizeable rebates and cut-rate financing incentives on the hoods of what are typically among the most profitable - and competitive - models in the industry. We recently found cash rebates on big pickups ranging between $500 and $3,000, depending on the year, make and model. And that’s not including any additional incentives that might apply, such as cut-rate lease deals and extra cash back to recent graduates, members of the military or select groups, current owners or those trading in models from competing brands. Incentives are likewise plentiful on gas/electric-powered hybrids these days, ranging from $500 to a high of $6,500, depending on the year, make and model, though they’ve hardly been the remedy for showroom apathy. “Five years ago the incentive spend of an average [hybrid car] transaction price was only around three percent; it is currently close to 12 percent,” Krafcik says. Some analysts note that the fuel economy of conventionally powered models is approaching that of hybrids, but without the requisite price premium to cover the complex gas/electric powertrain technology. There’s also a dearth of exciting new hybrids to capture buyers’ attention these days. The current Prius has gone without a major redesign since 2010, and has since swelled to include hatchback, plug-in and subcompact models. And far too many hybrids (Toyota Camry, Honda Accord, Ford Fusion, etc.) are indistinguishable from the gasoline-powered models upon which they’re based. However, the segment will likely get a charge from a number of distinctly designed all-electric models and plug-in hybrids (the latter with longer gas-free running times) headed to market in the coming years, especially those from luxury automakers. “Plug-in EV markets are expanding rapidly, and are set to grow much more quickly as several major automakers are slated to introduce vehicles in the high-volume SUV segment,” says Scott Shepard, a Navigant research analyst. “Sales coming from luxury manufacturers, including Tesla, Mercedes, Audi, and BMW, are expected to grow significantly through 2018 and eventually account for half of all plug-in models sold.”