Low Gas Prices, Recession, Hurt Honda Insight Sales
When the new Honda Insight was launched in late March of this year, analysts and Honda representatives were expecting big things. The vehicle would cost less than the current hybrid king, the Toyota Prius, offer great mileage, and carry Honda’s reputation for dependable vehicles. With low gas prices and the continuing economic recession, though, Honda is revising its sales expectations, at least in the U.S.
Honda originally estimated that they would sell 90,000 Insights this year, but that number has now dropped to a more realistic 50,000-60,000. Sales of the Insight, and all hybrid vehicles, in the United States have been relatively low because of the low price of gas, which for the month of May averaged 35% lower than the same month last year. Honda has also revised their estimate to reflect the fact that Toyota will be dropping the sale price of the Prius by $1,000 in order to compete with the Insight. In Japan, however, both models are doing incredibly well.
In April, the Insight was the best-selling car in Japan, a first-ever for a hybrid car in that country. The Prius took the top spot in May and continues to receive many orders for the latest generation of the model. The reason is fairly simple: gas is expensive in Japan. For the first week of June, gas prices in the U.S. average $2.65 per gallon for regular grade. In Japan, for the same time period, gas average $4.70, almost 80% higher. The success of the Insight, and all hybrid models, in the United States will, for the time being, be closely tied to gas prices. When prices at the pump start to go up, so will hybrid sales.
June 17th, 2009 at 5:15 pm
Here we go again! Low gas prices are once again killing demand for eco friendly green cars like the Honda Insight hybrid. Have we not heard this before?