Are Hybrids "loss leaders" for Manufacturers?

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Comments

  • gagricegagrice Member Posts: 31,450
    are you presenting yourself as the only person "smart enough" to see through the "Prius Conspiracy?"

    No offense taken. I think that your not asking mainstream buyers what they think. I ask people all the time how they like this car or that. First off most people have never heard of a hybrid. Next I did not say conspiracy I said gimmick. Blue light special comes to mind. It is purely a loss leader until the R&D is absorbed into the production cost. They can spread it around to other vehicles, it is still attached to the hybrid program. If I was a Toyota stockholder I would be interested in their plan to make the hybrid profitable. I'm not the only one on this board that thinks hybrids are losing money. I'm more open with my questioning. It would be interesting to get some input from a large stock holder that gets the real data.
  • larsblarsb Member Posts: 8,204
    quote gagrice-"If I was a Toyota stockholder I would be interested in their plan to make the hybrid profitable."-end quote

    I would comment on that by saying that since Toyota "already insists" they are making a profit on the Prius, the stockholders DO KNOW the facts.

    And unless they start bailing out soon (which with Toyota's recent track record that action would seem to be kinda goofy) I can reasonably assume that the stockholders know the truth. It would not be some board dwellers like us, it would be they who would be pitching a fit.
  • robertsmxrobertsmx Member Posts: 5,525
    It is purely a loss leader until the R&D is absorbed into the production cost

    "It" always is, hybrid or not. Even redesigns of hybrid or non-hybrid vehicles cost $$$ that takes at least a few months before the model is profitable. Simple rules of economics, really.
  • yerth10yerth10 Member Posts: 431
    Has any company disclosed the profit / loss for a vehicle ?.
    No, if the vehicle does not sell, they close production it it does sell, they increase the production.

    In Prius, they increased production, hence it is making profit. The first 2 vehicles to roll down this year are Envoy-XUV & Bonneville.
    Meanwhile Saudi's are saying that Oil will be in $ 40-50 range. Expect more SUV's to fall.
  • SylviaSylvia Member Posts: 1,636
    Hey guys - the parsing of posts (selecting one line to argue about) is really getting old. The horses are dead.

    Let's talk about the big picture here and keep the discussion moving along.

    Thanks!
  • tempusvntempusvn Member Posts: 119
    Some (relatively large) percentage of Hybrid Drivetrains, Technologies and Computer Programming is part of what will become Fuel Cell Drive Trains.

    Most everyone is doing Fuel Cell R&D.

    Even if Toyota is only making a miniscule profit on the manufacture of each hybrid, they are recouping some of that R&D cost, and have a real-world test bed to refine the components.

    Other companies sinking mega-bucks in Fuel Cells aren't getting any income from the research at all, and aren't getting any ROI.

    Not to mention the huge free publicity Toyota is getting.

    Seems like a smart approach to me. Sounds like a Long Term mindset, while maximizing Short Term benefit and income.
  • gagricegagrice Member Posts: 31,450
    Other companies sinking mega-bucks in Fuel Cells aren't getting any income from the research at all

    Actually you and I are dumping BILLIONS into fuel cell and other alternative energy research. It is going into the big corporations & universities R&D programs. I wonder if they come up with anything useful we will get a break if we buy them.
  • rfruthrfruth Member Posts: 630
    Heck no we won't get a break, got to hand to those Asian manufactures though (and Ford who was late but finally showed) they offer some decent (hybrid) vehicles at reasonable prices, gettn some field testing in, (some of which will come in real handy in the future) are earning major brownie points in the process and who knows what else.
  • sdctchersdctcher Member Posts: 21
    I just finished reading an article in the February 23, 2005 Auto Section of the LA Times. It was basically about Toyota and the expected MSRP of the new Lexus 440h but also discussed the Prius and the forthcoming Highlander Hybrid.

    The point was that the author had crunched the numbers for these cars and the various costs of additional car technical components to make the hybrids work as well as they do. His deduction was that all, even the Prius, are being sold, even today, at a substantial loss to the manufacturer. I would expect that this same thing is part and parcel of the Ford Hybrid. One reason I bought early was that I gambled that Ford would not sell a lemon and all the things that made the regular Escape into the FEH had to be worth more than $3,000 more. Since introduction, the FEH MSRP has risen by about $500 and I am guessing the 2006 will go up by at least another $500-$1,000.

    Some of us may applaud Toyota and Ford (and Honda also, I am sure) for taking the loss in order to move forward better environmental citizenship and create a new market for hybrids. This is surely part of the reason.

    The author believes, and has some proof for, the argument that there are other more business-like reasons. He quoted the amount of billions spent annually by each manufacturer for their entire line of cars and compared that to the amount of loss they may be sustaining on their hybrids.

    His hypothesis is that the loss is a very small percentage and compared to the great publicity the companies are getting by introducing new environmentally-friendly technology, it is extremely cost-effective. The companies are betting that by the time the loss become intolerable they will have each secured a sufficient portion of the market and lowered production costs to be able to start making a profit per vehicle.

    I believe he is right, and he emphasized that GM has missed the boat and will pay for it later. It is going to cost them dearly paying for catch-up.

    If he is right about this hidden strategy, I find it fascinating and would hire the marketing genius behind it in an instant.

    Just my opinion.

    Mike
  • gagricegagrice Member Posts: 31,450
    I believe he is right, and he emphasized that GM has missed the boat and will pay for it later. It is going to cost them dearly paying for catch-up.

    I see this misconception on this forum a lot. Tell me who builds the hybrid buses that are going into service around the world daily? I believe they are making a profit on those at $500k each. I imagine each hybrid bus reduces the equivalent emissions of many cars. Let's give credit where credit is due. GM has been involved in hybrid technology since before Toyota motor co ever thought of hybrids.
  • yerth10yerth10 Member Posts: 431
    "I believe they are making a profit on those at $500k each."

    If GM can make profit by selling 300 buses, think of Toyota which has made 300,000 hybrid vehicles.
    They must be milking honey.
  • mirthmirth Member Posts: 1,212
    It's easy to make a profit if you sell a car for $500,000. It's hard when you do it for $25,000, even if you don't have to make up billions of dollars in R&D.
  • yerth10yerth10 Member Posts: 431
    300,000 / 300 = 1,000

    Toyota are selling 1,000 vehicles for every 1 sold by GM. Do you think that still they are not making profit.

    BTW, so many models are selling less than 100,000 / year. So according to you those models will not make a profit.

    Toyota Matrix
    Honda Element
    Chevy Aveo

    If Toyota has made loss, other companies wont have joined the game. I mean Honda & Ford.
    As we said, only time will tell. Meanwhile Hybrid Sales are going up.
  • gagricegagrice Member Posts: 31,450
    Meanwhile Hybrid Sales are going up.

    Are they? which ones are going up? Honda hybrid sales have been posted for January. All down compared to January 2004. I have not seen Prius or Escape comparison figures. We know that Escape has sold 36 so far to SF & FL. Or is it all hype and wishful thinking?

    PS
    Honda had Hybrids in the US before Toyota, the Insight.
  • larsblarsb Member Posts: 8,204
    No, hybrid naysayers are the ones with the "wishful thinking."

    "January 2005 Hybrid Sales Almost Double from Prior Year
    Supported by ongoing demand and additional models, combined US sales of hybrids in January 2005 almost doubled from levels in January 2004, rising 98.8% to 8,455 units from 4,252 units the prior year.

    January sales are generally the lowest of the year, and the auto industry as a whole saw December 2004 to January 2005 sales decline some 30%. Hybrid sales, by contrast dipped 19% from their record-breaking December.

    Toyota continued to lead the market with 5,566 units of the Prius—an increase from January 2004 sales of 90%."

    http://tinyurl.com/4p9hs

    and also:

    "Hybrid vehicle sales expected to at least double in 2005:

    Many auto industry experts predict 2005 to be a breakthrough year for sales of hybrid vehicles. Toyota, Honda and Ford together sold 88,000 of the cars that run on a mixture of gasoline and electric power. The companies now say they expect to sell as least twice as many this year. Some of the more optimistic forecasts predict 500,000 to one million sales before next January."

    from:

    http://www.newstarget.com/003597.html
  • gagricegagrice Member Posts: 31,450
    Toyota continued to lead the market with 5,566 units of the Prius—an increase from January 2004 sales of 90%."

    So we have a figure to go on. That means the Prius with it's celeb appeal is the only one that sold decent in January. With Honda selling about 2000 units, that leaves the Escape selling about 900 give or take. Approximately half of Ford & Honda's projected output for 2005. Even the Prius will need to ramp up sales to make the 100k mark they have set for this year.

    The rest is all speculation. I think the American buying public is smart enough to see that they are not practical at the current prices. If they sold at near invoice as most cars are selling they have a shot at making a mark on the tally sheet.
  • larsblarsb Member Posts: 8,204
    OK Gary, which is it?

    your quote:

    "I think the American buying public is smart enough to see that they are not practical at the current prices."

    and your quote:

    "First off most people have never heard of a hybrid."

    So they are smart enough to know the economic factors of a car they have never heard of?

    OR your quote:

    "It is the fact that they saw the Prius at the Oscars or some other Gala event. They decide to check it out."

    which indicates people are "celeb sheep" just buying because celebs do...

    So, are they both smart enough to know the economics of a car they have never heard of, and also dumb enough to just buy a car because Leo has one?

    Which is it? :):)

    (I hear you pondering this dilemma)
  • gagricegagrice Member Posts: 31,450
    So, are they both smart enough to know the economics of a car they have never heard of, and also dumb enough to just buy a car because Leo has one?

    I think you have covered the population pretty well. Not to stereotype anyone, I would say people are sheep looking for the lead goat. Whichever goat they follow will answer all your questions.
  • gagricegagrice Member Posts: 31,450
    "It is the fact that they saw the Prius at the Oscars or some other Gala event. They decide to check it out."

    According the Chris Rock "only gay guys watch the Oscars, if they are not part of Hollywood". I guess that tells you who saw the Prius at the Oscars. I said most people have not heard of a hybrid. I did not say they had not heard of a Prius. Most have NO idea that the Prius is a hybrid. It is a goofy looking car that DeCaprio drives and they want one....
  • kernickkernick Member Posts: 4,072
    I would have bought a hybrid, or would still buy if I could make some economic sense of it.

    Last year I went out and bought a new car. As I have a Firebird and live in NH, I really wanted it to be AWD or 4WD. But I thought the Prius was interesting.

    Now here's how I figured, I wouldn't even go look at 1 because the value wasn't there. Because the sticker on the Prius is close to $25K, and there are no incentives or discounts because of the low production value, I found that other cars were much better values even after considering the gasoline usage difference.
    For instance let's talk about what I decided on. I bought a Jaguar X-Type, MSRP = $30K for $22.6K delivered. It has AWD. It has 4/48 warranty AND maintenance. It is stylish, and reasonably powerful.
    The only advantage the Prius had was mpg. If I wanted a high mpg car I could go buy a Corolla which is pretty nice, save $10K, and use that to buy gas for the life of the car. The Corolla is known reliable, and the costs of repair are known and fairly low I'm sure. The Prius is a bunch of ?-marks.

    I could of waited to see if I could get a Ford Escape hybrid to get the AWD, but seeing how few there are isn't encouraging. And anyway my 2.5 liter, 5-speed X-Type returns 30 mpg hwy, so there is only a few mpg difference with the hybrid Escape. And I'd pay MSRP or more for the Escape.
  • rfruthrfruth Member Posts: 630
    The whole Chris Rock / Oscars thing makes no sense, isn't he putting down some people, rubbing others the wrong way and generally limiting his audience ? More to the point (and more importantly) a Prius runs a lot cleaner than a Jag, how that doesn't make economic sense is beyond me.
  • larsblarsb Member Posts: 8,204
    I'm sure the Prius will be cheaper to maintain than a Jag which MSRPs for $10K more than the Prius. It's cheaper to maintain and own over five years than the Chevy Malibu !!

    "IntelliChoice Ranks Prius #1 in value - That means a Prius owner will pay less to own one for five years than any other model of that price."
  • falcononefalconone Member Posts: 1,726
    Let me get this straight. The Prius sold over 50,000 units in 2004 but Gary thinks its a car only for celebrities. How many units of the 50,000 sold belong to stars? What a ridiculous statement from the doom and gloom man. I suppose the escalade is the vehicle only a rapper would be comfortable driving. Gary... get up and smell the coffee. Toyota is on the right track and GM is nearly derailed.
  • stevedebistevedebi Member Posts: 4,098
    "It's cheaper to maintain and own over five years than the Chevy Malibu !! "

    Hmmm, interesting numbers, given that the Gen 2 Prius has only been on the streets for 1.5 years...
  • railroadjamesrailroadjames Member Posts: 560
    I could have gone on and on about the 2nd Gen. PRIUS but I'm tired of running the gammit of all the great reasons to drive a PRIUS HYBRID. The less said the better. FALCONONE SAYS IT BEST
    I SAY DITTO!
    GARY..Smell the GREEN TEA!
    Culliganman (the BIG 3 are sitting on theirs while Toyota has a waiting list)
  • gagricegagrice Member Posts: 31,450
    It's cheaper to maintain and own over five years than the Chevy Malibu !!

    "IntelliChoice Ranks Prius #1 in value - That means a Prius owner will pay less to own one for five years than any other model of that price."

    That is total meaningless speculation. IntelliChoice has NO idea how much value is in a car over 5 years when the car has not been around for two years. Did they base that on something they got off a Ouija board? They should have stipulated that you don't get as much car with the Prius as you do any other car for that price. You can buy the top of the line Accord or Camry for what you pay for a Prius. That is what I consider Purely Hype. They based that on a 2005$20,875 Prius. Does not even have side airbags. Anyone out there buy a $20,875 2005 Prius, please give us the details. That is so deceptive on the part of IntelliChoice.
  • kernickkernick Member Posts: 4,072
    a Prius runs a lot cleaner than a Jag, how that doesn't make economic sense is beyond me.

    me: Are you arguing just for the sake of arguing? That makes no sense at all. With reasoning like that my bank account should increase significantly tomorrow if I don't drive?
  • kernickkernick Member Posts: 4,072
    I'm sure the Prius will be cheaper to maintain than a Jag which MSRPs for $10K more than the Prius.

    me: no, I doubt that. Because the maintenance for the Jag is $0 for 48K miles. Meanwhile the Prius will have had how many oil changes at a Toyota dealership that charges $30 per? $40 per/ Wipers? Tire rotations? Sounds like it's adding up.

    Also MSRP has nothing to do with what most non-hybrids sell for, and has nothing to do with what maintenance costs. A Jag takes a $3 Fram filter and use $1/quart oil.
  • railroadjamesrailroadjames Member Posts: 560
    had my 04 Prius for 14 months and had two free oil & lubes (and free car washes). I look for bargans like WAL-MART...OIL & LUBE For $12.95 W/Filter. I even like to do the basics myself. Wipers are easy and even brakes are not as bad as some would think. Heck get to know your car. It's fun. Have you ever seen the underside of a Prius? It's cool. Alright, I know that Hybrids are complex and ya gotta take it in to the dealer for some maintanence and TSB's and Recalls but you have a unique car. Get to know the manual AND the car. It's fun.
    Now, take that 10 grand you saved not buying the Jag and go on a couple of cruises (one to Alaska and the other to the Carribean) You'll still have enough left over to buy Jet SKI and have fun this summer.
    Culliganman (DO THE DEW)
  • SylviaSylvia Member Posts: 1,636
    discussion is about loss leaders for the manufacturers, not which car is cheaper to maintain.

    Thanks for getting back on topic.
  • kernickkernick Member Posts: 4,072
    http://www.usatoday.com/money/autos/2003-03-06-ford-hybrid-suv_x.- htm

    Note that they understand that most people are willing to pay a small premium for a hybrid, but "it has to be small". When you start talking about $5K premiums over a comparable vehicle that is a lot. And in today's heavy discount environment where $7K to $8K off a $25K vehicle is not unheard of, hybrids do not look like a good value.

    An Escape hybrid will sell at sticker because of the tru higher cost and the demand due to the limited supply. A regular 6 cyl. Escape with rebates and discounts will be more than $5K less.
  • railroadjamesrailroadjames Member Posts: 560
    Miss read and that (I hope) won't happen again. Sorry.
    You can buy a Jag for $22,600 ??? WHERE? Is this a bare bones one? Actually I like the looks of several Jags but seldom find one that holds value like I feel sure the Prius will.
    Back on topic tho, I feel that we're in a critical down turn in the auto industry. One that puts tremendous pressure on the "direction" makers. Toyota, in my opinion, has taken research & development to a much higher level and obviously poured mega bucks into the Hybrid Program that has left the loss area and now it has turned the corner toward profits. Give credit to the designers of the 2nd gen. Prius. It is a "10" in the eyes of a vast array of critics. Both in outer skin and inner hybrid technology. Where are the "BIG 3"? I think the answer to that is...seriously in trouble". If fuel prices escallate...Look Out! The companies that looked to the future with insight will have the advantage. The companies that went with "BIG" and V-8's" will be trying to find ways to convince the public that their vehicles are smart or cool or prestigous to own (what we call fibs).
    Culliganman (hybrids R smart)
  • kernickkernick Member Posts: 4,072
    You can buy a Jag for $22,600 ??? WHERE? Is this a bare bones one?

    me: you could a few months ago. Yes a barebones one - 5 spd. 2.5l, sticker $30K, $5500 rebate, plus a small dealer discount. But barebones is leather, wood, AWD, climate control ... see the X-type forum if you want to know more; don't know what the current incentives are.

    It is a "10" in the eyes of a vast array of critics. Both in outer skin and inner hybrid technology.

    me: it seems nice in many respects. But again people don't want to pay less in gas but pay more overall, if vehicles are similar in quality. For example I see Camry's listed for $15K, or Coralla's for $11K. Yes you might add a few things to bring it up to what the Prius has. But then again maybe the Prius has more options than a person wants, who is mainly interested in the lowest overall cost.

    And for anyone who goes out and looks at these Cost-of-Ownership calculations these sites are doing... well you'll be getting the wrong conclusion many times because they don't account for rebates. For example included in my X-Type is depreciation from $30K to $20K first year. That looks bad, but it's wrong! They don't account for rebates and discounts. Now if you're buying a hybrid and have to pay MSRP ...

    The companies that went with "BIG" and V-8's" will be trying to find ways to convince the public that their vehicles are smart or cool or prestigous to own (what we call fibs).

    me: the car companies simply provide what people want. Car companies have found out many times they can't PUSH product. All the cool commercials , etc. could never make the Pontiac Aztek, Toyota Echo, etc. desireable. People buy V-8 cars and trucks because they are fun and more utilitarian then lesser vehicles. And there really isn't that much difference between the mpg of many V-8's and 6 and 4 cylinders. For instance I a 4-cyl alternative to my Firebird would be an Impreza STi; I get 25mpg combined, check what the STi is. Check what the mpg difference is between a V-8 truck and a V-6; not much.

    You should also consider whether hybrids are smart if they compromise safety thru mass or structural strength to achieve higher mpg. The main safety problem today is size differential between vehicles. People can state all they want how everyone should be driving a small, efficient vehicle, but the fact is there are a lot of larger vehicles on the road, and it is facts and not idealist desires, you must live with.

    And here's the crux of the problem I have with all the pro-hybrid hype I see here. If the comapnies making hybrids are not losing money, or very close to it - Prius may have turned the corner like you said, where are the hybrid vehicles? Why isn't Toyota or Honda cranking up the parts factories and making every model and vehicle on any redesign, a hybrid if it's such a good value and idea?

    There are 230M vehicles and growing, on the roads today. If hybrids are ever going to play a part in slowing our energy usage, millions / year are needed. No pro-hybrid person wants to discuss why any manufacturer isn't going to hybrids as fast as they can, if its such a good value to the market, and profitable for the company. Why didn't Toyota make plans to produce the Prius in quantity if successful? When Ford in the 1960's, found out how popular the Mustang was going to be, within a year or 2 they were producing 500K of them per year. Why aren't we seeing this with the Prius or other models converted to hybrids.

    People aren't against hybrids, and certainly not against saving money. People like to drive, but don't like to pay money at the pump. Do you think people are stupid and can't figure out what's the best value? Does it make sense to go buy a $25K Prius and pay $10/week for gas, or go buy a 1-year old Taurus for $11K and pay $20/week for gas?

    Hybrids have to make financial sense to the average buyer, and that is very difficult as the manufacturers of hybrids pay extra for those hybrid systems. It's not much different then the Segway which is a great idea, but when you look at the value it's not there for most people.
  • tempusvntempusvn Member Posts: 119
    "For example included in my X-Type is depreciation from $30K to $20K first year. That looks bad, but it's wrong! They don't account for rebates and discounts"

    Yeah, apparently they over-estimated the value of the Jag.

    KBB Trade in Value for a 2004 with 15K miles in excellent condition.

    Your $22.5K Jag nets $18,400

    A $22.5K (MSRP) Prius nets $19,250

    As far as Safety Goes, NHTSA rates the Prius even with the Jag (Well, Prius wins 5 Stars to 4 in Driver Frontal), even though they are rating the Side Air Bag Jag versus the non SAB Prius.

    Probably because of the special High Strength Steel Passenger Cage in the Prius.

    Of course you would expect the Prius with SAB to toast the Jag.

    And your final question:

    "where are the hybrid vehicles? Why isn't Toyota or Honda cranking up the parts factories and making every model and vehicle on any redesign, a hybrid if it's such a good value and idea?"

    Dude, where have you been. That's exactly what Toyota is doing, as fast as the parts and manufacturing capabilities allow.
  • gagricegagrice Member Posts: 31,450
    Dude, where have you been. That's exactly what Toyota is doing, as fast as the parts and manufacturing capabilities allow.

    Not True. They are increasing the Prius very nominally. They built 12k per month last year and are planning to increase that to 15k per month this year starting in June. By way of Contrast they are increasing the PU trucks by 120k units this year or 10k per month increase. Have you heard of any waiting list for a Toyota PU truck? They need to keep the Prius price levels high because it is still a "Loss Leader". If that is not the case which this thread is all about. Show some Proof that they are making money. There is No way they could be even close to recouping the R&D after 8 years on the market. I still think that is why Cho got booted out as President.
  • railroadjamesrailroadjames Member Posts: 560
    So Toyota didn't put all their eggs in one basket. Show me a car maker that has and you'll see a disaster in the making. Toyota has been and is being attentive to the new found popularity of the 2nd Gen. Prius. It is so much more improved over its predecessor.
    I've seen numbers on the increase of production and your numbers don't jive. There are more cars on the way.
    As to Toyota being a loss leader, WELL, my money's on TOYOTA. They've got profits coming in and great cars going out.
    Six months from now if gas prices go through the roof or even 30% higher lets see how WE see the Hybrid market then. See if you really like $60 plus fill ups, while I'm laying down $20 bucks.
    As we speak Toyota is reving up more cars in the hybrid catagory.
    Culliganman( 2nd Gen Prius is no loss)
  • tempusvntempusvn Member Posts: 119
    Gary

    As usual, you ignore the facts and re-state your guesses.

    Fact - Toyota says the Prius is profitable from a production standpoint. If you have information to the contrary, the burden is on you to 'prove' the case.

    Fact - The limiting factor on hybrid production has been and is battery availability. Panasonic is ramping up production capacity as fast as they can, but in the meantime Toyota is producing every hybrid they can.

    Fact - R&D Costs are not part of the 'profitability' of the first product to use the technology. They are amortized across the life cycle of the technology. Toyota has said they are going to use Hybrid Technology in every type of vehicle they produce within 5 years, and they are also licensing the technology to other manufacturers, which of course would also count as income. Ford, Nissan, Subaru and Porsche are already on board. That's the way you recoup R&D costs, with long term plans well executed, not with a single month of production.

    Your conspiracy theories are amusing though.
  • gagricegagrice Member Posts: 31,450
    Your conspiracy theories are amusing though.

    What conspiracy? I am saying they are not building enough to satisfy the buyers, because they are not profitable. They make Toyota look "Green" and get people to buy other Toyota cars that are profitable. What other vehicle does Toyota build that has a 6 month or longer wait list? My take on it is logical while yours is emotional. You think because the hybrid is a good idea that it just has to work out and become an important part of the automotive landscape. I and others with clear heads say, until it is cost effective for the average buyer it will be a novelty for the rich environmentalist buyers. Toyota Says: the average Prius buyer makes $100k per year. That is upper middle class in my view.
  • railroadjamesrailroadjames Member Posts: 560
    I couldn't agree with you more(tempusvn). Gary obviously is not a hybrid proponent. I thought his comments came right out of Mel Gibson's "Con-spiracy Theory" movie.This Subject of "LOSS" is quite missleading in my mind. Every auto manufacturer has costs that are a part of overhead. R&D is a price one pays in order to stay competitive in a very competitive dog-eat-dog business. One more note about R&D. It has a strong tendancy to share with other cars it's improvments thus one new inovation becomes part of many cars in the entire line. Honda's R&D has surely advanced the other hybrid cars in its line up. Same applies to Toyota and all of its line up. Old saying still applies....You gotta spend $$ to make $$.
    Culliganman(Free us Prius)(from OPEC)
  • kernickkernick Member Posts: 4,072
    me: I'm simply stating that the rebates and discounts are not counted when these auto-sites calculate cost of ownership. I used my car simply as an example, not saying the 1st year depreciation is better than a Prius.

    you: As far as Safety Goes, NHTSA rates the Prius even with the Jag (Well, Prius wins 5 Stars to 4 in Driver Frontal), even though they are rating the Side Air Bag Jag versus the non SAB Prius.

    me: You missed this part; from the NHTSA website: "Remember: Frontal star ratings should be compared only within the same weight class, or within +/- 250 pounds of the vehicle weight." Try the IIHS website http://www.hwysafety.org/ and you'll see an X-Type is a "Best Pick" in the midsize category.

    you: Dude, where have you been. That's exactly what Toyota is doing, as fast as the parts and manufacturing capabilities allow.

    me: Who "allows"? Well Toyota (or any other manufacturer) of course. If they have 1 factory and 1 battery facotry, and aren't building more; or even faster converting factories, then yes the parts are coming as fast as "allowed".

    A large company such as Toyota with the money they have in the bank, not needing loans, should need no more than 1 year to start-up as many Prius factories as needed. When Ford launches an F-150 truck, or had a big hit when it launched the Taurus in the 80's, they didn't come to market with 50K or 100K units, and tell the markets it's going to take years to build more. Why? Because they are profitable, and any reasonable company is going to move at flank-speed to get product to market.

    As I said before if you can sell a Prius at MSRP and its making the same margin between cost and MSRP as a Camry, but Camry's are being discounted $4K off MSRP, Toyota would convert at least some if not all Camry factory production to Prius's. Why would any company make $1K per Camry when that production line could make a car selling at MSRP , and not give thousands away?
  • kernickkernick Member Posts: 4,072
    you: Gary obviously is not a hybrid proponent.

    me: so many people in these forums insist on classifying people as Pro or Con, black or white. And what happens is when people bring facts, that either side doesn't like it's classified as an attack.
    Pros think Priuses are the best in every category, and have no negatives. And Cons see no positives. But I think gagrice isn't that CON, and hybrid manufacturer's statements don't match what would be expected as the reactions of a business making money on a product or technlogy.

    I see positives the Prius has, and I see the Cons mainly due to the fact it sells near MSRP, while everything else sells for many thousands off MSRP.

    Summary: 1) Believe what you see and what is actually happening; words are cheap. 2) ask "Why" 5 times to get to the root. And I think that is what we're doing in questioning why it is taking so long to get substantial numbers of hybrids built. It is an impartial, 60-Minutes type questioning, rather than blindly trusting a deified corporation. I have no faith that Honda or Toyota are anymore trustworthy than GM, and that they're any different than Enron or Tyco. They're all into for the $, and will do what makes them the most $.
  • railroadjamesrailroadjames Member Posts: 560
    You say they're in it for the $$$..Of course thats for real but I really believe that there's a great deal of pride puting out a quality car. I use to see that pride in American cars but it has dwindled as of late. I keep hearing satified Toyota owners and then there's the critics that have given a big thumbs up to the Prius Hybrid
    Lastly, you indicated that a "con" was the Prius being sold @ MSRP. That's the problem with the American mentality. If you don't get the price reduced by some gimmic or rebate or incentive.."that's not the way we do it man!" Well, I paid MSRP and no "tack-ons". I think ...no I know I got what I wanted in a hybrid. If you think I see only thru rose colored glasses, I just want to say..I've found faults with the Prius...Not many but a few. Still I find the everyday enjoyment of people inquiring about my car almost a pleasure to partake of. Incidently have you driven one?
    Culliganman(to know one is to drive one)
  • gagricegagrice Member Posts: 31,450
    I have no faith that Honda or Toyota are anymore trustworthy than GM, and that they're any different than Enron or Tyco. They're all into for the $, and will do what makes them the most $.

    That is the bottom line. For some reason many here think that the CEOs of Honda & Toyota sit at the right hand of Buddha. They are just CEOs trying to make their stockholders happy. What makes the stockholders happy is selling cars at a nice profit. No one in the industry thinks they can build a Hybrid as cheap as a conventional ICE vehicle. You will see them all dragging their feet on delivering hybrids. If the Prius was a money maker everyone that wanted one would already have one. If the truth were known Honda is jumping with joy that their hybrids are not selling very well. If someone wants a Honda they will buy one and I'll bet they make a bunch more on a V6 Accord than an HAH. Did Ford only build 900 Escape Hybrids for sale in January, or are the buyers not there? My local Ford dealer had 100 people with deposits before they were released. Now she has them available on the showroom floor.
  • tempusvntempusvn Member Posts: 119
    "What conspiracy? I am saying they are not building enough to satisfy the buyers, because they are not profitable."

    Yeah, That conspiracy. The burden of proof is on you. If all you can do is 'say' it over and over, well, that's what conspiracy theorists do.

    The one about Toyota Managment heads rolling over hybrids is another good chuckler.

    Oh, yah, the $100K figure you keep tossing out.

    A little searching will reveal that the average new car price is >$28K, which is more than the most expensive Prius.

    It will also reveal that the average income of new car buyers is >$75K which is less than the figure you wave around for Prius Buyers.

    The only thing the $100K figure proves is that Prius Buyers are more frugal than the average New Car Buyer.

    The point you're missing (or ignoring) is that people who don't make a certain amount of money aren't in the market for new cars. They buy used cars.

    So, the question is not where does a certain income put you compared to all people, but where does that income put you in comparison to the pool of new car buyers.
  • gagricegagrice Member Posts: 31,450
    Yeah, That conspiracy. The burden of proof is on you. If all you can do is 'say' it over and over, well, that's what conspiracy theorists do.

    I really don't know how you can construe what I perceive as a business decision by Toyota as a conspiracy. As far as Cho getting replaced that was a theory with no real basis, just speculation. Aren't you curious why they would get rid of a guy that had taken them to the top of the Auto world as far as profits are concerned? Usually when a President of a corporation leaves they have a retirement party with a gold watch.

    What does it mean to you, when I go to a Toyota dealership and ask about the Prius, and am told I would be better off with a Camry? I understand the guy wants to sell what he has on the lot. He tried to be very convincing that the Camry was a wiser choice and I would be a lot happier with it. That is when it struck me that all the Prius is to Toyota is a LOSS LEADER. All car dealers use them, why is it so hard for you to understand businesses are there to make money? Must be the green colored glasses....
  • stevewastevewa Member Posts: 203
    "What does it mean to you, when I go to a Toyota dealership and ask about the Prius, and am told I would be better off with a Camry?"

    It means he has Camrys on the lot, and no Priuses, and he knows Mr. Honda Dealer has HCH and HAH down the street, and if you go hybrid shopping there you'll get one, so he wants to convince you that you don't really want a hybrid at all.

    Don't assume a dealer's behavior has anything to do with corporate direction. Dealerships are totally independent businesses which have no direct P/L responsiblity to the car maker. The dealer owns the cars on his lot and he wants to move them out.

    As has been said multiple times, Toyota has publicly stated they are making a profit on the Prius. If you have documuented proof that they are not, I'm sure the Japanese equivalent of the SEC would love to see it.
  • kernickkernick Member Posts: 4,072
    U: Of course thats for real but I really believe that there's a great deal of pride puting out a quality car.

    me: I can't think of many cars that are poor quality these days. You may not like the styling, or think the materials aren't as luxurious, but the vehicles otherwise run well and last a long time. VW has had some quality issues though, so blame the Germans.

    U: I keep hearing satified Toyota owners and then there's the critics that have given a big thumbs up to the Prius Hybrid.

    me: yes, and that's true probably of 100 other cars.

    U: Lastly, you indicated that a "con" was the Prius being sold @ MSRP. That's the problem with the American mentality.

    me: I think you have that backwards. In the U.S. most transactions are for the sticker price. people don't bargain in Walmart, Sears, K-Mart, BestBuy. Now if you go around most of the world - or even been to Mexico, you'll realize a price tag is nothing but a point to start negotiating from.

    you: Well, I paid MSRP and no "tack-ons".

    me: that's fine. When demand is beyond supply that happens. The price of a vehicle then is dependent on who will pay the highest. You probably did well getting the vehicle for that price. But whether it is a good decision compared to other vehicles would also be a separate comparision.

    you: Still I find the everyday enjoyment of people inquiring about my car almost a pleasure to partake of.

    me: yes, I would find it interesting too.

    you: Incidently have you driven one?

    me: No. Because I see the Prius's purpose as being "saving money". And frankly if I wanted to save money, I would sacrifice the option differences between a Prius and a low-level Corolla (or a Cobalt), and buy one of those for $10K - $11K and get pretty decent mpg.
    I wanted AWD to handle NH weather, and for my 23K got the luxury of a Jag, and get a decent 28mpg. My only hybrid choices in 4WD would be the Escape and the new Lexus SUV. Both will be hard to get , and thus MSRP (which will be thousands more than my car) or even higher. And I don't think those vehicles are going to get more than a few mpg more than my Jag.

    What sort of mpg do you think I'd get with the Prius, if it had AWD, when the air-temp in the winter is between -10 and 30F, and putting sticky Bridegestone Blizzak tires on it, and then put it on some snow-packed roads?

    If the hybrid does not save me $4K in gas within the first few years, it makes no sense, IMO, to buy it.
  • gagricegagrice Member Posts: 31,450
    Toyota has publicly stated they are making a profit on the Prius.

    I keep hearing that repeated. I remember one statement by the head Toyota guy in America saying that they were breaking even on the Prius. That is not making a profit. That means they are selling them for what it costs to build them. I may have missed the link where Toyota said the Prius is Profitable.

    Honda has said they spend $30k building each Insight. Is that also profitable when they sell for $20k?
  • railroadjamesrailroadjames Member Posts: 560
    Tom, you took some serious time to respond to my comments and I'll try to do like-wise.
    1st..About pride..You stated,"I can't think of many cars that are poor quality these days." You own one (Camaro & Firebird) that has had two of the flimsiest front fenders in the industry (lean against them and they buckle or dent so easy). Same cars also had a reputation for floorboards rusting thru. I know because I owned 2. Other current cars that have serious problems are Neons (exhaust problems) & rusting. G.M. carsthat just can't hold their paint. You must have seen this a few times. How about Chrysler trucks and SUV's with wheels falling off w/ susspension problems. These are serious lemonites where I come from.
    2nd..About paying MSRP..My point is, we in America go in to dealerships with a game in mind to haggle and that is to be expected in cases where you're trading in a car Since I sold cars for close to 5 yrs I saw (and played) the game because it was the only one in town. I didn't like it but what are you going to do. I see Saturn Dealers are breaking the mold. I hope it continues.
    3rd..You said you haven't driven a Prius..That is your loss. I read your Bio and you sound like someone who enjoys the adventure that cars deliver these days. I realize that the Prius is not all things to all people but a test drive might change your mind (I know it did mine). I realized that, for the most part, I didn't need an SUV as much as I thought. If YOUR needs demand more vehicle then so be it. As to the price...I paid $21,265.00 out the door and that was $1,245.00 more than an Altima that I was considering at that time (incidently they were only discounting the Nissan about 4-500 dollars)Popularity I guess.
    Culliganman(I average 47mpg's winter--53mpg's summer)I've yet to put more than 19 bucks in the tank on a fill-up)
    ps enjoyed your opinion
  • kernickkernick Member Posts: 4,072
    you: ps enjoyed your opinion

    me: yes I enjoyed the banter and debate. You almost have me convinced ... if gas gets near $3/gal. this summer ... but then again.

    you: You own one (Camaro & Firebird) that has had two of the flimsiest front fenders in the industry.

    me: Well I haven't damaged one waxing yet. ;-) I do remember seeing it had good crash test ratings though. The only problems I've had in 3.5 years has been headlights burning out - that's a bulb supplier issue, and I've warped the front rotors. I know rotors have been an issue for other F-body owners, and that'll I correct with some aftermarket ones. Otherwise looking good, and getting 25mpg in hilly terrain, with the auto. 28 mpg hwy.
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