Prius sales up

Prius sales up

Toyota Motor Corporation has been caught flat footed, a rare thing for the savvy car company. The volume of advance orders in Japan for the new model 2010 Prius have been so great that they have been thinking of cutting down shipments into the U.S, where the redesigned and remodeled hybrid is scheduled to go on sale within just a few days. This would have likely led to higher prices as supply would have been outstripped by demand. Luckily though, Toyota has decided on increasing production at two Prius plants instead. Toyota, which launched the third-generation Prius in Japan earlier this month, had expected to sell only about 100,000 of the fuel-efficient hybrids there through December. Surprisingly though, dealers have taken advance orders for close to 80,000 and have been reported to have sold another 20,000 in just the two weeks since the launch. So, in other words, they have sold their expeted yearly 100,000 with six months still to go until the end. Probably the reason the company did not keep pace was that the Prius sales had dropped as the price of gas went down. I think a lot of the drop had to do with the fact that people were waiting for the new model to come out and were delaying their purchases, not simply the global slowdown in demand for cars in general. The company is now plans to increase Prius production to 500,000 cars from 400,000 to keep pace with the increased demand from its dealers. Toyota is said to be increasing operating hours at its Prius plants in Fujimatsu and Tsutsumi in Japan to increase such production. Plans for a Prius plant in Mississippi, put on hold last year as the economy took a dump and Toyota began looking for ways to cut expenses much like other car companies are doing, are said to be unlike to be restored this year even with the increased demand. It would not be a bad idea for Toyota to keep a tight leash on production.

Sales are still low and who knows where the economy will be in a year. Luckily for Toyota, the gas prices keep rising, giving more impetus for people to buy a Prius. By keeping production low, Toyota also keeps the vehicles profitable, as dealer’s waiting lists continue to grow. Dealers can then mark prices up to above sticker and everyone is happy, except the consumer of course. Now Toyota’s only problem is competition from Honda's lower priced Insight hybrid. If consumers pick up on the fact that they can get that car cheaper, even though it doesn’t get as good of gas mileage, they may be willing to forgo the waiting list and jump ship to Honda. Hopefully, so American car companies can pick up on this too, and introduce some competition into this market segment that is one of the few bright spots in the car market today.