"I can't think of a better place in the world than Sao Paulo, Brazil, to own hybrids," said Steve St. Angelo, CEO of Latin America and Caribbean operations for Toyota and Lexus, citing traffic and gasoline prices. "However, that's really not the reason they buy it," he told Automotive News.
"They buy it because it's high technology, and they've found that it's fun to drive," said St. Angelo, who oversees operations in the 40-nation region (excluding Mexico, which is part of North America). "It's starting to become a fashion statement to buy a Prius."
In fact, all of Toyota's stable of hybrid vehicles are doing well, including those sold by luxury brand Lexus, whose hybrids make up nearly half of its growing sales in South America, Central America and the Caribbean.
Regional sales of Toyota and Lexus hybrids more than doubled last year to 5,333 cars and crossovers, with the Prius making up about 60 percent. Hybrid sales grew from 0.04 percent of total deliveries in 2014 to 1.3 percent last year, the company said.
To be sure, those gains are coming from a very low base, St. Angelo said, but it's just the beginning of a sales push that will bring more hybrid models to more countries.
Toyota and Lexus hybrid sales are just starting this year in Argentina, the region's second-biggest market, in addition to the two dozen countries where hybrids were sold last year, the company said.
In Mexico, the base Prius goes for about $21,000 including taxes and is exempt from anti-smog measures that limit access to the Mexico City metropolitan area during smog alerts. Hybrids also don't pay annual registration fees and are charged lower toll rates on some highways.
In heavily taxed Brazil, a base Prius runs about $40,000, even though it benefits from an import tariff of just 4 percent, compared with 35 percent for non-hybrids.
Toyota de Mexico provides a case study in ramping up hybrid sales.
Annual Prius sales in Mexico went from a few hundred units in the first half of the decade to 7,193 last year, which was a 10 percent increase over 2016, the company said.
The Prius topped its segment in Mexico last year, easily beating the Volkswagen Passat, Kia Optima and Toyota Camry, according to the Mexican Automotive Industry Association. The cars are considered "luxury" models in Mexico because of their relatively high price.
In the wake of its sales success, Toyota is introducing a second hybrid into the Mexican market, the smaller Prius c.
Toyota de Mexico said it plans to sell 10,000 hybrids in Mexico this year. The brand's total sales in 2017 were 105,464 units. Lexus doesn't operate in Mexico.
St. Angelo said the ramp-up in his region includes educational exhibits in public spaces since many people still believe that hybrids need to be plugged into a power outlet and could weigh on the electric grid.
"We've created what we call 'hybrid house,' a temporary building that goes up, and it's used to teach and provide awareness of what hybrids really are," he said.
The hybrid push is part of a larger effort by St. Angelo to increase Toyota's sales in Latin America, where Nissan, Volkswagen and General Motors are among big players. The region was consolidated as one unit in 2013 under St. Angelo after operating as 40 entities before his arrival.
Total Toyota and Lexus vehicle sales in the region have risen from about 322,000 in 2012 to 419,000 last year, and market share has grown over the same period to 9.5 percent from 5.3 percent, he said. a