Demand for Fuel-Efficiency Rolls On, Despite Earthquake's Impact on Hybrid Supply

It would take a force of nature to knock off track the booming demand for hybrids. And it literally did in April as the earthquake in Japan caused significant supply disruptions of the top-selling hybrid models. However, April sales results proved March’s seismic shift in consumer demand for fuel-efficient cars was no fluke.

A lack of availability of the Toyota Prius, the new Lexus CT 200h and other hybrid cars in the showroom meant a dip in hybrid sales by 27 percent compared to record numbers in March.  Nonetheless, hybrid sales were still up by 5 percent compared to last April, and are 25 percent higher so far this year.

Toyota confirmed that it was lack of supply, not lack of demand, that slowed hybrid sales in April. According to Greg Thome, manager of Toyota Division Communications:

"You can't have disruptions in production, like we're having post-disaster, without it having impact…We're feeling it with Prius, where the interruption in production, coupled with increased demand due to gas prices, leaves us with about a five- to 10-day supply."

When car buyers weren’t able to find a new hybrid—at least one that hadn’t been marked up due to fever-pitch demand—they either scrambled over to the used lot for a pre-owned hybrid, or put a fuel-efficient gas-powered on their shopping list.

General Motors credited the 30-mpg Chevy Cruze—also available as the Cruze Eco with 42-mpg on the highway—as a reason the company’s sales shot up by 27 percent in April. Sales of the Cruze shot up an astounding 180 percent. Don Johnson, vice president, U.S. Sales Operations, in a company press release, said:

“Recently, rising fuel prices have led many to re-think their vehicle choice…Because of the investments we’ve made in fuel-efficiency and global product architectures, the company is well positioned to meet these needs.”

Ford similarly reported that the new Fiesta and Focus—and the new, lighter and more efficient Explorer—was the key to its 16 percent sales increase.  Ken Czubay, Ford’s U.S. chief of sales and marketing told the New York Times, “Dealers were telling us they were selling [the Focus] right off the convoy truck.”

Another indication that fuel-efficiency remains hot is the lagging demand for full-size  pickups. G.M.’s passenger car sales were up 50 percent in April compared to a year ago, while full-size pickups only managed a 2 percent increase for the month.  In fact, auto dealers had to put, on average, a $3,200 rebate incentive on large trucks—according to—to get consumers to go against their strong desire for smaller high-mpg models.  That’s $1,100 more than the industry’s average incentive for April.  (Based on this, can anybody really argue that automakers’ investment in efficiency isn’t a sound business decision?)

It yet another indication that fuel-efficiency is hot, clean diesel sales grew by 42 percent in April compared to the same month last year, 2.4 times faster than the market average.

The impact of the March 11 earthquake is not over.  It will continue to affect availability of specific models, like the Toyota Prius and the all-electric Nissan LEAF, for a good part of this year.  Any resulting flatness in hybrid or EV sales might give the impression that consumers are ambivalent about cars with the best efficiency technologies.

As my last blog pointed out, auto industry lobbyists fighting the proposal for a 60 MPG  standard by 2025 want us to believe that drivers don’t want fuel-efficient cars.  But don’t be fooled. April sales numbers re-affirm what GM, Ford, Toyota and other automakers know: stronger pollution and fuel economy standards are good for consumers, good for automakers, and good for the environment.