WASHINGTON -- I was talking gas prices with Ford's Jim Farley on the roof of a Washington, D.C., museum earlier this week when I nearly fell off.
Farley, Ford's group vice president of global marketing, sales and service, shocked me when he said: “You can't sell a hybrid in today's market.”
The statement on its own isn't shocking.
But we were on that roof for the media introduction of the 2011 Lincoln MKZ hybrid sedan. The luxury car goes on sale this fall.
Farley's frank assessment of the hybrid market was refreshingly honest.
He believes gas prices will level off over the next six months. That's not good for hybrid sales.
It's already having an impact. August sales of the Honda Insight fell 52 percent to 2,030 compared to a year ago. Demand for the Toyota Prius tumbled 38 percent last month to 11,799 units. And the MKZ hybrid's competitor, the Lexus HS sedan, posted sales of just 594 units in August compared to 543 in August 2009. It was a tough month to measure hybrid demand, for sure -- a year ago, hybrids fared well under the government's Cash-for-Clunkers program.
But year-to-date demand for the Insight and Prius is down or flat, in an overall light vehicle market that is up 8 percent ths year.
When I reminded Farley he's about to launch a hybrid, he calmly acknowledged that Ford doesn't expect to sell 10,000 or so MKZ hybrids -- even though Lincoln won't charge a premium for the sedan's gas-electric powertrain either. Ford is launching the car because it's the smart thing to do and it rounds out the product lineup, he said.
Clearly, Ford and its chief marketer mean it when they say they aren't just chasing market share anymore, they to want to establish a 'green' image as well.