No pricking the Prius bubble -- yet

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

So far, the recent shrinkage (as George Costanza might say) of the oil price bubble hasn’t brought much relief to buyers of another overpriced commodity — the Toyota Prius.

Data tracker J.D. Power & Associates reports that Priuses remained scarce on dealer lots during the first three weeks of July, even as gas prices began to inch down.

The gas-electric hybrids — which get the best fuel economy of any mass-produced vehicle sold in the U.S. — are staying on dealer lots for an average of five days. The average ‘time to turn’ for all vehicles sold in the U.S. is more like 60 days, meaning that Priuses are basically arriving in showrooms already spoken for.

Some dealers around the L.A. area do have unclaimed Priuses in stock (Toyota of Glendale, for example). But Longo Toyota in El Monte, the world’s largest Toyota dealer, has a three-month waiting list.

That scarcity has helped keep Prius prices in the fast lane. Kelley Blue Book, which tracks auto pricing, says Priuses are selling for $1,000 to $1,500 above the car’s sticker price of $22,160 to $24,430 (depending on trim level) — and this at a time when overall auto sales are at recessionary levels. Used Priuses also command premium prices. That’s especially true in California, where a Prius with the coveted HOV lane sticker — which are transferable to the new owner — can add thousands of dollars to the resale value.

Other hybrids, including the Honda Civic hybrid, which has fuel economy numbers almost as good as the Prius does, aren’t experiencing the same level of demand. Libby thinks the Prius’ distinction as a purpose-built hybrid — as opposed to a hybrid version of an existing model — is part of the reason for that.

Toyota recently said it would raise the suggested retail price of the 2009 Prius by $500. The automaker reportedly is set to increase Prius production by 70%, but analyst Tom Libby of J.D. Power said that won’t help wannabe buyers anytime soon. Nor will modestly lower gas prices.

A bigger threat could be posed by the expected debut early next year of Honda’s long-awaited hybrid-only car. Spy photos recently surfaced, taken during a Death Valley driving test. Although heavily camouflaged, the vehicle looked suspiciously like a ... Prius.

‘If any manufacturer has the brand credibility to take on the Prius, it would be Honda,’ said Eric Noble, president of auto consultancy the Car Lab. ‘I’m not sure that overtly copying the Prius’ exterior design was the way to do that, but it’s apparently the way they’ve chosen.’

Still, the hybrid Honda is expected to cost less than a Prius. And that could finally take a bit of the air out of the Prius bubble.

— Martin Zimmerman