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Sales of hybrids pick up speed

Times Staff Writer

Hybrid sales are on a roll, and it’s no secret what’s driving them.

“It’s called $3 gasoline,” said Fritz Hitchcock, who owns Toyota dealerships in Santa Barbara, Northridge and the City of Industry. “We are absolutely, positively liking hybrids, and it’s only going to get better.”

That wasn’t the consensus a few months ago. The growth rate of hybrid sales in the U.S. slowed last year, and some analysts expected the trend to continue as the federal tax credit on many models shrank, the pool of “early adopters” dried up, and California -- which accounts for more than a quarter of all sales -- stopped handing out carpool lane stickers to hybrid buyers.

But the dramatic rise in gas prices this year, coupled with greater availability of the most popular models and lower prices, is giving sales a real boost.

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In the first three months of the year, sales jumped 91% compared with the same period of 2006, to 59,613, according to research firm AutoData Inc. In March, year-over-year sales of the segment-leading Toyota Prius climbed 142% to 19,156.

Prius sales were juiced by a rush to buy before the federal tax credit on the vehicle was cut by 50% on April 1 to $788 per vehicle. But other popular models also showed strong growth last month, including hybrid versions of the Honda Civic (up 26%) and the Ford Escape sport utility vehicle (up 51%).

Zoe Friedlander, 44, of Hancock Park bought a 2007 Prius three weeks ago. “I was very excited to get a Prius so I wouldn’t have to pay those high gasoline prices as often,” said the database manager, adding that her new ride gets about 40 miles per gallon.

Since Jan. 1, gas prices in California have risen from $2.61 a gallon to $3.25 as of Monday.

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Hybrid vehicles reduce fuel consumption by switching between a gasoline engine and a battery-powered system that is recharged during braking. Hybrid versions of traditional cars can improve fuel economy by as much as 30% even under the new stricter mileage rating system.

Although gas savings are attracting buyers, having more cars on dealer lots has also helped. Toyota is boosting production of U.S.-bound Priuses by almost 50% to an annual rate of 110,000. That’s giving buyers more bargaining room -- the cars are selling for almost $3,000 less than last summer, according to Edmunds.com. The average sale price of a base model is now about $21,200, according to Edmunds. Toyota is offering discounts of $600 to $2,000 a vehicle on common options packages.

“That has made the economic argument for buying a hybrid much more compelling,” said analyst Alex Rosten of Edmunds’ AutoObserver.com.

Almost 700,000 hybrids have been sold in the U.S. since 1999. They accounted for 1.8% of vehicle sales last month, double the year-earlier market share.

New hybrid models should help build interest among car shoppers, analysts say. These include the 2007 Saturn Aura Green Line, sedans from Hyundai and Kia in 2009 and Honda’s introduction of a car that, like Prius, will be sold only with a hybrid powertrain.

Still, the tougher federal mileage ratings, which hit hybrids hardest, and the reduction of tax credits could steer a significant number of buyers away from the segment, according to a recent poll by online auto site Autobytel, which described the lower fuel economy numbers as “a new kind of sticker shock.”

martin.zimmerman@ latimes.com


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