Hong’s Cave

Being somewhat of a tech geek, I seriously thought about getting a Lexus RX400h since I have been looking for a larger car and at the gas prices.

However, I gave up when it actually came out several months ago. It was just too expensive for what I was getting. Even the Toyota Highlander Hybrid was significantly more expensive. Although the published mileage was good (~27 highway, ~30 city), but it was not “amazing”, and the “real” mileage is often much lower than the “are you for real?” EPA mileage.

Initially they seemed to be selling well: the preorders seemed to be good (I was one of them, though), and it seemed it was difficult to find one on the lot.

Fast-forwarding to several months later, it seems there are signs now that they are not as popular as Toyota has hoped (and as the media hyped). There are reports that some are being sold below MSRP (a couple of thousand dollars below). Also, it seems that the Toyota management has finally realized that there is something wrong with their current hybrid plan.

Today I’ve read an article by an Australian paper, “Toyota to rethink on ‘big electrical appliance’” (free registration required) via Autoblog. It seems the sales of Harrier and Klugger SUVs (respective Japanese names for RX and Highlander) aren’t selling well in Japan either. And Toyota is considering revising their current hybrid strategy of putting hybrid drives into existing models, and instead create hybrid-only models.

This really is not surprising considering the sales trends of hybrid vehicles so far. Although there are many hybrid passenger vehicles out in the market, the only “hot” item has been Toyota Prius (still about a couple of months of waiting). Honda’s hybrid-”enhanced” existing models (Civic Hybrid and Accord Hybrid) have not been selling well. And it seems the same fate awaits for RX400h and Highlander Hybrid.

So, why is that? Although it may not apply to everyone who bought Prius, but you cannot deny that Prius, with its distinctive looks, is helping the buyer to proclaim to the others that he/she cares about the environment. Without the clearly visible distinction, he/she is finding it difficult to overcome the “hybrid premium” mentally.

Sure, Prius does have a wow factor in the fuel consumption, but so does Civic Hybrid.

Another reason, according to Mr. Hori of Toyota as mentioned in the Age article, if the hybrid option is available on an existing model, it is unavoidable that the potential buyers would compare with non-hybrid models. And when the hybrid models are 20% more expensive, then it just does not become attractive.

It will be interesting to see what would happened to Lexus GS450h and Toyota Camry Hybrid that Toyota already showed at recent auto shows. Will they scrap the plan? Or if they’ve invested too much already in them, maybe just do a nominal production run? But it is clear we won’t see any more hybrid versions of existing models beyond what’s already announced.

After reading the article, another idea occurred to me (I am sure it did to Toyota as well). Toyota already has shown that creating a separate brand for a certain segment works (Scion, for example). I think Prius is already close to a brand of its own. So, why not create a brand especially for hybrid (or non-ICE-only) vehicles? I am sure the extra marketing and engineering costs would be there, but I think it just might make sense.