Market Snapshot

HONDA HYBRIDS HOPE TO RETAKE MARKET


The Honda CR-Z concept shown here will likely evolve into one of several production hybrids Honda plans to sell by 2010.


With consumer demand for hybrids skyrocketing as gas prices soar, Honda is making plans to sell more than 500,000 hybrid vehicles a year. Honda admits to underestimating hybrid demand and hopes that revamping their current efforts will allow them to sell more than 200,000 units a year by 2010, according to BusinessWeek.

While Honda was the first major automaker to start selling hybrids in the United States back in 1999, their effort has been overshadowed by the Toyota Prius. Toyota has sold over 1.5 million hybrid vehicles while Honda has sold 277,000. The only hybrid included in Honda’s current lineup is the Civic Hybrid.

Honda represents one of the few automakers that has been experiencing growth in the auto industry. Honda reported sales growth of 14% in June as their major competitors saw profits eroded by a weakening economy and fuel prices. Success can be attributed to their focus on smaller vehicles.

The question at hand is whether the rise in hybrid vehicles will affect the specialty equipment market. According to SEMA research, hybrid vehicles currently represent a negligible portion of the vehicles for which enthusiasts buy specialty equipment. Current trends suggest that this will soon change, however.

Although hybrid vehicles represent a small portion of the automotive market, as enthusiasts make the switch from gas-powered to hybrid vehicles, they will likely want to customize their vehicles in a similar fashion. In addition, the demographic of individuals buying hybrids has also changed. Formerly purchased by consumers focused on ecological protection, more consumers concerned with fuel economy have turned to hybrids as well.

SEMA’s members have the opportunity to prepare themselves for the influx of hybrid vehicles whose sales are expected to increase dramatically over the next few years. SEMA members are invited to download a copy of the "2008 Alternative Fuels Market Report: Part 1" at www.sema.org/research for more information on this market.

Sources:
Rowley, Ian. “Honda goes whole hog for hybrids.” BusinessWeek. July 17, 2008.