Slow Sales of Honda Insight Give Insight into Hybrid Market
Are hybrid cars still considered niche, or even — dare we say — "luxury" purchases?
The failure of the lower-cost Honda Insight hybrid to dent the market for the Prius has some in the auto industry answering yes. Business Week reports that the Insight, which was introduced this year with a base MSRP of $19,800, over $2,000 less than the Prius, is still being outsold by Toyota’s car 6 to 1.
The Insight's sluggish sales is proving a useful cautionary tale to other automakers looking to catch up to Toyota in the hybrid market, and some have already made major strategic shifts as a result.
General Motors, which will introduce the Volt late next year through its Chevy brand, has scrapped plans for a "Prius-killer" hybrid sedan that would get 53 miles to the gallon. Part of the reason, no doubt, is that the beleaguered car company needs to focus its energies on making the Volt successful. But the other big reason is Prius’ merciless crushing of the Insight.
Rich Liberal Elitists Driving Fancy Hybrid Cars
The Insight, which is based on the Honda Fit subcompact body, was meant to be a low-budget hybrid, a car for a market segment that may not exist. Honda hoped to sell 40,000 Insights this year, but now admits it will fall far short of that goal. From the Business Week article. It’s not clear that the Insight will ever seriously challenge the Prius because Honda has overlooked a lesson Toyota learned years ago: Hybrids aren't a budget purchase.
According to Business Week, many Prius owners make more than $100,000 a year. The 3rd generation Prius, which went on sale this year, features a bigger, more powerful engine, more passenger space, and "Lexus" touches. Not to mention egregiously expensive — yet environmentally snazzy — options like a solar powered roof ($3,600).