Hybrid car sales zipping along

Mileage: With gasoline prices up, the fuel-stingy Honda Insight, Civic Hybrid and Toyota Prius are attracting buyers to area showrooms.

March 25, 2003|By Laurie Willis | Laurie Willis,SUN STAFF

Escalating gasoline prices may be causing motorists to grumble as they empty their wallets to fill up tanks, but for some Baltimore-area Honda and Toyota dealers, higher fuel prices have meant increased sales of hybrid cars.

Spokesmen for Honda and Toyota say sales of hybrid cars - which get better mileage than regular cars because they have a smaller gasoline engine that's assisted by an electric motor - are up nationally. Honda has two types of hybrid cars, the Insight and the Civic Hybrid. Toyota's hybrid is called the Prius. Motorists say the cars get in the area of 50 miles per gallon.

"Last month, the only three car lines that were actually up over the previous year were the most fuel-efficient cars, Echo, Corolla and the Prius," said Joe Tetherow, spokesman for Toyota Motor Sales USA. "For February, Prius sales were up 33 percent from a year ago, and that's nationally. That was a record month for Prius. From what I'm hearing from our dealers and our sales departments now, Prius sales are very strong for March as well."

Andy Boyd, manager of public relations for American Honda Motor Co., said sales of hybrid cars were up 35 percent in February and officials are "looking to have another good month" when March sales are tallied.

"Certainly one of the biggest factors we see is the rising price of fuel and the attention being paid to fuel efficiency," Boyd said. "If you chart fuel prices and hybrid sales, there's clearly a correlation."

Boyd said Honda officials saw a similar spike in sales in May, June and July of 2001, when gasoline prices were also high. "We saw Insight sales virtually double," Boyd said.

Besides getting high mileage, hybrids offer other "incentives." For one, the Internal Revenue Service allows hybrid owners to claim a $2,000 tax deduction. The deduction must be taken the year in which the car was first used.

And, here in Maryland, at least, there is no sales tax on hybrid vehicles.

David Cole, president of the Center for Automotive Research in Ann Arbor, Mich., said he thinks the fact that many states allow hybrid cars to travel in HOV, or high occupancy vehicle lanes, has added to their popularity.

"There's no question that there is some increased demand," Cole said. "I think the high gas is part of it, but part of it is they are well-executed vehicles. In any relatively new technology, there's a certain customer base that likes to be the first on the block with that new technology. I think it's very possible that demand will keep going up."

Locally, some dealers are noticing higher sales of hybrid cars. "I would say we probably have a 25 percent increase in requests for them, and in buyers it's probably about a 15 percent increase," said Tim Fling, sales manager at Bill Kidd's Timonium Toyota. "I think in the next three or four months we're going to see a surge in the demand for them."

At Heritage Honda in Parkville, sales manager Eric Dyckman said demand for hybrid vehicles has been steady. "What causes the demand to spike is partly the gas prices and partly the fear of gas prices continuing to increase," Dyckman said. "We're trading people out of full-size cars, Lincolns, Mercurys and Chevys, and you're also trading people out of older Accords who are also getting hybrids. The other thing we see is people upgrading from an old Civic to a new Civic Hybrid."

A Civic Hybrid may cost about $3,000 more than a regular Civic, Dyckman said, "but you save $1,000 up front on taxes in Maryland, then there's the $2,000 tax credit, so all of a sudden your gap just got smaller. You've got a difference of $1,500 now, and that's not hard to justify with gas at nearly $1.88 a gallon."

Cole, of the Center for Automotive Research, said it remains to be seen how strong the market is going to be for hybrids.

"This is not an inexpensive technology," Cole said. "What will ultimately determine the success or failure of these vehicles is the economy. Can you sustain these products if the tax credit goes away, the sales tax [break] goes away, the HOV lane goes away?"

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