“At $1.50 a gallon, the American public is not willing to pay for fuel-saving technology,” GM Vice Chairman Bob Lutz said at last week's Detroit auto show.
American Honda Motor Co. and Toyota each sold 12.5 percent fewer hybrids last year than in 2007.
Ford Motor Co., No. 3 in hybrid sales behind Honda, suffered the greatest decline, down 22.2 percent. GM nearly tripled sales to 14,439 after adding hybrid versions of the Cadillac Escalade, GMC Yukon and Chevrolet Malibu and Tahoe. Honda sold one hybrid for every eight Toyota delivered.
Fuel prices changed habits
Consumers changed their buying habits when gasoline prices passed $3.50 a gallon in April, Fin O'Neill, president of the market research firm J.D. Power and Associates, said in a speech last week in Detroit. After topping $4 in July, fuel prices tumbled to an average of $1.62 per gallon last month.
The sliding cost of gasoline coincided with a global financial crisis that squeezed credit and dragged vehicle sales to 25-year lows in the fourth quarter.
Hybrids weren't immune. Prius sales in November and December plunged more than 45 percent, prompting Toyota to delay plans to build the car in the United States.
The abrupt shift in Prius demand shows that fuel-efficient vehicles lose some appeal when gasoline prices are low, AutoNation Inc. CEO Mike Jackson said Wednesday at the Automotive News World Congress. A government that mandates fuel efficiency should use a fuel tax to encourage consumers to buy energy-saving vehicles, he said.
“Cheap gasoline combined with fuel efficiency mandated by the government is an economic and environmental disaster for America,” Jackson said. “When the cost per mile driven goes down, people buy bigger, faster” cars and trucks, he said.
But consumers do want fuel-saving technology, other speakers told the World Congress.
“North America is catching up with the rest of the world -- particularly the North American consumer -- on the importance of these things,” said Harold Krivan, president of the consulting firm Sawgrass Solutions LLC.
For now, automakers need to bring green technology's cost in line with its value to consumers, said Andrew Brown Jr., chief technologist at Delphi Corp.
“People want the technology, but it's got to be economical,” Brown said. “That's the challenge in the industry now: to get the cost of those components down.”
Most of the figures for hybrid sales come from automakers; the National Renewable Energy Laboratory provides estimates for Nissan, along with the 2007 totals from GM that were used to calculate its gains for last year.
Arlena Sawyers contributed to this report