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Toyota's Prius draws a crowd, but trucks, SUVs are still selling

Published: Sunday, July 13, 2008

  This is a good time to be a Toyota dealer. Its lineup of fuel-efficient vehicles, led by the Prius gas-electric hybrid, has a marketing edge when gasoline costs about $4 per gallon.

Since no one wants SUVs and pickup trucks, people must be lining up at Shore Toyota in Hamilton Township to buy cars getting more than 30 mpg, right?

Like much conventional wisdom about high gas prices - fewer tourists will drive to the shore, people will flock to public transit - this notion is not robustly supported by reality.

"Surprisingly, there is still a good majority of people buying full-sized pickups and SUVs," Mark Bruschi, general manager at Shore Toyota, said this week. "We are off about 15 percent for those vehicles from where we were."

And the dealership previously was in "almost a frenzy" of big-vehicle sales following the introduction of new models of the Toyota Tundra pickup and Sequoia SUV.

Bruschi said part of the reason sales of full-sized vehicles have held up better than expected is that there are big incentives, such as zero-percent financing on them.

"I'll show a customer a lease payment on a six-cylinder vehicle and then the dramatically cheaper payment on an 8-cylinder, and they realize they could buy a lot of gas with the payment savings and get the vehicle they want," Bruschi said.

But incentives alone don't explain a combined SUV and pickup sales drop of only seven vehicles per month.

"Frankly, I've talked to people in the showroom after they've bought a full-sized vehicle and asked them what their motivation was for buying a 16 to 18 mpg vehicle. I've had women tell me they have four or five kids in the family, or they're still going skiing, still going to the beach, still towing their trailer," Bruschi said.

And companies and tradesmen still need pickup trucks, he add-
ed.

There is strong demand for the Prius, certainly, enough that there's a wait of three weeks to a month for one, depending on color and options.

But from the dealership's point of view, the beauty of the much-publicized Prius is that it brings people in the door. Once inside, customers find out about Toyota's regular cars that get high mileage: the Yaris, Corolla and Matrix.

A lot of people decide that a Corolla getting 35 mpg and costing $16,000 works better for them than a $27,000 Prius, he said.

The Yaris, which costs less and gets better mileage, has the overall lowest cost to own and operate compared with any vehicle, according to automotive researcher Edmunds.com.

Shore Toyota owner James Richardson has seen gas prices help and hurt business over the years. High prices prompted a move to smaller cars in the 1980s that helped, and then low gas prices encouraged sales of large domestic vehicles in the 1990s.

Toyota will honor Richardson for his 25 years as owner at 11 a.m. Tuesday in a small ceremony with local officials.

Although full-sized SUVs and pickups are still selling pretty well, Toyota seems convinced that the future is in hybrids and other high-mileage vehicles.

Toyota said this week it was scrapping plans to make Highlander small SUVs at its new Mississippi plant and instead will make it a Prius plant, the first in the United States.

Likewise, it will suspend production of Tundras and Sequoias for three months and make the pickups in just one North American plant, not two.

The conventional wisdom that Americans will shift to smaller, more fuel-efficient vehicles is almost certainly correct, but it will happen more slowly than most expect.

As usual, it is easier to predict the future than say when it will come to pass.

E-mail Kevin Post:

KPost@pressofac.com

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