Hybrids Ready for Breakout, but Big SUVs Still Sell

Roughly 187,000 hybrid vehicles were sold in the U.S. in the first half of this year, putting hybrids on target for record sales of 345,000 units for all of 2007, according to J.D. Power and Associates. Rising gas prices, along with lower, discounted prices on hybrids earlier this year and an increase in the number of hybrid offerings later this year will guarantee hybrid sales for 2007 will top the previous record of 256,000 unit sales for 2006, Power said.

Expect more competition in the hybrid segment, Power said, with up to 65 hybrids — 28 cars and 37 light trucks — in the market by 2010, when sales are expected to reach nearly 775,000 units. Still, hybrids only account for 2.3% of sales today and even with the projected growth, they’ll still only account for about 4.6% of the total U.S. new car market by 2010.

The Toyota Prius continues to be the most popular hybrid, selling 94,503 units in the first half of this year or 50.6 percent of the entire segment, prompted in part by incentives up to $2,000.

Don’t write off full-size SUVs yet. None are ranked among the industry’s most fuel-efficient, yet in the first half of this year, the three top sellers in the full-size SUV segment, the Ford Expedition and Chevy Tahoe and Suburban, accounted for sales of 160,000 units, with both Expedition and Suburban posting impressive sales gains while gas prices rose. Expedition sales are up 22 percent, Suburban sales are up 22 percent, while the Tahoe’s sales fell 12.5 percent. Perhaps consumers are waiting for the hybrid version of Tahoe this fall; it offers 25 percent better mileage.