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Honda to discontinue hybrid Accord sedan
6/5/2007, 8:12 p.m. ET
By BREE FOWLER
The Associated Press [spacer.gif]
NEW YORK (AP) -- With gas prices reaching record high levels and increasing public interest in environmentally friendly technologies, you would think that any car labeled as a hybrid would sell easily.
But Honda Motor Co. on Tuesday announced that it will discontinue the hybrid version of its Accord sedan, citing disappointing sales.
Analysts said that despite the Accord's superior performance compared with some of its higher-volume competitors, it just doesn't fit with the current consumer demands for the smallest, cheapest hybrids with eye-popping fuel economy.
Brian Chee, an analyst with the vehicle research firm Autobytel.com, said the Accord's relatively low fuel economy and high price tag compared with other hybrid vehicles made it a tough sell.
"It was a pretty perky performance car that it was fun to drive, but it was expensive and it was not exactly what people were looking for as far as a hybrid," Chee said. "It was a clean-burning performance vehicle, but people wanted a hybrid with fuel economy."
The hybrid Accord gets an estimated 28 miles to the gallon in the city and starts at about $31,090, while the hybrid version of the company's smaller Civic sedan gets about 49 miles per gallon and starts around $22,600, according to Honda's Web site.
By comparison, Toyota's market-leading Prius model gets an estimated 60 miles per gallon and carries a $22,175 price tag, and the Toyota Camry hybrid gets about 40 miles per gallon and has a $26,000 sticker price.
"The Accord gets good mileage and that's just it. Hybrids have to get great gas mileage in order to sell," Chee said.
Honda, Japan's No. 2 automaker, said it will keep making the hybrid version of the Civic but stop offering the hybrid Accord after the new model expected to go on sale later this year.
In the years since its debut in 2004, Honda sold a total of 25,000 hybrid Accords, and just 6,100 last year.
In comparison, it has sold more than 153,000 of the Civic hybrids since they went on sale in 2001 in Japan, Europe and North America.
Meanwhile, demand for Toyota Motor Corp.'s market-leading Prius hybrid has taken off, with 729,800 units sold since December 1997. The
company also has sold 53,681 of the Camry hybrids since they hit the market in May 2006.
Bill Kwong, a spokesman for Toyota, said that while the Camry sedan has not produced the same sales volumes as the Prius, Toyota officials are happy with its sales performance and have no plans to take it off the market.
Kwong said the Camry has had more sales success than the Accord because of its lower sticker price and more fuel efficient four-cylinder engine, compared with the Accord's more powerful, but
less efficient, six-cylinder engine.
Brett Smith, senior industry analyst at the Center for Automotive Research in Ann Arbor, Mich., agreed that the Accord's price and fuel economy hurt its sales, but said it also remains unclear exactly how much demand there is for hybrid vehicles overall.
"Certainly there are those who are interested in hybrids and think fuel efficiency is good thing, but it comes down to willingness to pay for it," Smith said.
Smith said that as a hybrid vehicle's premium over its traditional gas model increases, the number of people willing to pay that premium
Chee said General Motors Corp.'s "aggressive" entrance into the hybrid market also could shake things up.
GM said Tuesday it would introduce four new hybrid models this year:
two-mode gas-electric systems in the Chevrolet Tahoe and GMC Yukon large sport utility vehicles, and hybrid systems for the Saturn Aura and new Chevrolet Malibu sedans.
Smith said GM is billing the SUVs as no compromise vehicles that will provide the power and performance SUV drivers have come to expect, but it's too early to tell if they'll catch on with consumers.
As with other hybrids, sales of the SUV models will depend on the automaker finding the right mix of power and fuel economy to attract buyers, he said.
Chee said he thinks there's a market for the larger hybrids, even if the fuel savings is minimal.
"A lot of people buy large vehicles because they need to tow and they need to haul people as well," Chee said. "I think anybody who owns a large vehicle is going to appreciate any fuel savings and they're going to be willing to pay for that.