When you compare the fortunes of the Hummer to those of its opposite—Toyota’s hybrid Prius, which can get upwards of 50 miles per gallon—it looks like the market may be shifting. First sold in the United States in 2000, the diminutive Prius remained a curiosity as the Hummer rose to celebrity. But sales rose to about 20,000 in 2002 and to 24,000 in 2003. Since the new 2004 model was introduced in the fall, the Prius has been stomping the Hummer. In November 2003, the Prius outsold the H2 by a 2-to-1 margin, according to Autodata. In January 2004, Prius sales were up 82 percent from January 2003.
For the 2004 model year, Toyota initially boosted production 50 percent to 36,000. But demand has been strong enough that production has already been increased to 47,000. And that’s still not enough. My Toyota dealer doesn’t have a Prius on the lot and says that interested purchasers must put down a deposit today and wait six months. By contrast, my local Hummer dealer has several on the lot.
Comparing the Prius and the Hummer is like comparing apples and oranges, or apples and watermelons. The Hummer costs more than twice as much as the Prius—although the absurd, huge federal tax break available to purchasers of giant vehicles for business use reduces the price a lot. (Those who purchase a Prius receive a smaller and shrinking tax break.)
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Those who buy Hummers and Priuses are symbolic, marginal buyers. But economists will tell you that behavior at the margins can influence entire markets. In the summer of 2002, the marginal buyers were pushing hard for the gas guzzlers. Today, more people are clamoring for fuel-efficient cars.
It’s amazing how rising gas prices and a shitty economy can force big macho Americans to wake up. Or listen to their wives…