Automotive | All About Automotive

Hybrid car sales in June were up 9 percent from a year ago and rose 2 percent compared to last month—outperforming the overall new car market that was down 28 percent from June 2008 and off 7 percent from May.

June hybrid sales suggest that hybrids are recovering more quickly than the overall car market—just as they defied the economic downturn several months after overall car sales started to decline in 2008. June marks the sixth consecutive month of higher hybrid sales.

Nationally, car dealers sold 26,205 hybrids in June, the highest one-month total in 13 months.

Hybrid car sales numbers exceeded 3 percent of the new car market, and could reflect the beginning of an anticipated long-term trend in which hybrid market share grows by as much as 1 percent every year.

Dozens of new hybrid models will be introduced in the next few years. The world’s largest carmakers are significantly investing in increased production capacity for hybrid cars and advanced auto batteries.

The overall market continues to suffer, but declining sales have begun to slow down for four of the six major carmakers. Ford reported the smallest drop of 10.7 percent. Jesse Toprak, executive director of industry analysis for Edmunds.com told Associated Press, “It is unlikely things will get any worse."

The Toyota Prius led the hybrid pack with 12,998 sales, representing 49.6 percent of all hybrid sales in June. The vast majority of Prius sales—85 percent, according to Toyota—came from the new 2010 model. The introduction of the new Prius apparently affected sales of the 2010 Honda Insight and Honda Civic Hybrid, which declined by 25 percent and 42 percent respectively, compared to last month. Sales of the Ford Fusion Hybrid continued to gain momentum, jumping nearly 10 percent compared to May.

Rising gas prices—from $2.28 per gallon in May to $2.64 last month—may have contributed to an increase in hybrid sales in June.

Toyota Motor Corp. and Honda Motor Co., Japan’s two largest carmakers, slowed the decline in domestic auto sales last month as their new hybrid models and government incentives boosted demand.

Sales of cars, trucks and buses, excluding minicars, fell 14 percent to 243,342 vehicles, the Japan Automobile Dealers Association said in a statement today. Toyota sold 110,677 units excluding Lexus brand cars, down 11 percent. Honda posted a 5.7 percent gain, and Nissan Motor Co., Japan’s third-largest automaker, sold 21 percent fewer units.

The pace of decline in auto sales slowed last month from 29 percent in April and 19 percent in May, as government subsidies and tax cuts helped boost sales of Toyota’s new Prius and Honda’s Insight gasoline-electric hybrid cars. Monthly sales may flip to a year-on-year increase as early as August, according to auto consulting company CSM Worldwide.

“The subsidies and tax cuts are kicking in,” said Yoshiaki Kawano, a CSM analyst in Tokyo. “The numbers will improve as gasoline prices were surging around this time last year, putting a damper on car sales.”

Toyota on June 25 said it has booked 200,000 domestic orders for the third-generation Prius, introduced in May. It was Japan’s best-selling standard car that month, surpassing Honda’s Insight.

Under a government program started June 19, consumers can apply for a 250,000 yen ($2,600) subsidy if they scrap a car more than 13 years old to buy a new one and 100,000 yen for a new car purchase without scrapping an old one.

Car dealers have distributed 260,000 applications for the subsidies, Takeshi Fushimi, director of the Japan Automobile Dealers Association, told reporters today. The subsidies are available retroactively for purchases from April 10.

* June 2009 Auto Sales: Toyota Leads Japan Output Drop
* June 2009 Auto Sales: Signals of Auto Recovery
* June 2009 U.S. Auto Sales: GM, Toyota, Ford Lead Top 10 Million Rate

The government expects the incentives to lead to the sale of an additional 690,000 vehicles this fiscal year. Electric, hybrid, natural gas, and some diesel vehicles also qualify for an exemption from the country’s weight and purchase taxes.

Still, domestic sales are expected to be the worst in three decades, as wages fell for a 12th straight month and the jobless rate rose to a five-year high in May. The Japan Automobile Manufacturers Association predicts domestic industrywide sales will drop 8.5 percent to 4.3 million units in the year ending March.