At one time Toyota thought the Prius hybrid could be as big a seller as the Camry midsize sedan, which traditionally racks up more than 400,000 annual sales in the U.S.
In the near-term, the automaker thought it could increase U.S. sales of the car 30%.
But if this year’s performance of the new fourth-generation Prius sedan is any indication, neither of those predictions may come true.
The redesigned Prius sedan went on sale in January in the U.S. and in just one of the past six months did the 4-door post a sales increase compared with year-ago. In February, the car had a 1.4% increase adjusted for the daily selling rate, Toyota says.
From January through June, Prius sedan deliveries fell 10.5% from like-2015, with 48,475 units sold. That’s better than overall hybrid sales, which fell 15.5% through June.
However, WardsAuto data shows the extended year-over-year sales decline is unprecedented in the history of a new Prius sedan.
When the third-generation Prius debuted in June 2009, sales went up in 11 of the 12 ensuing months. A 3.0% DSR dip in October 2009 was the only downturn until June 2010’s 15.4% plunge.
The debut of the second-generation Prius in October 2003 began 28 straight months of year-over-year gains for the car, which finally experienced a 7.5% decline in February 2006.
What’s behind the fourth-gen Prius sedan’s lackluster performance? Opinions differ, but low fuel prices, a slew of new competitors in the green-car space, polarizing styling and America’s light-truck love affair all are factors, observers say.
“I think the majority of the issue with hybrid sales in general is obviously gas-related,” Paul Holdridge, vice president-sales for Toyota Div., Toyota Motor Sales U.S.A., says July 1 upon release of June 2016 sales results.
The national average for a gallon of regular unleaded was $2.28 on July 1, according to AAA. That compares with $1.59 ($2.08 adjusted for inflation) in 2003 and $2.35 ($2.63) in 2009.
Toyota has seen success this year with hybrid versions of its Highlander and RAV4 CUVs, as well as the Lexus RX hybrid CUV, playing to the notion the Prius’ body style may be limiting its market acceptance.
Analyst Dave Sullivan of AutoPacific cites as factors the popularity of light trucks due to low fuel prices, as well as some highly regarded new competition, such as the Chevy Malibu Hybrid.
A source close to Toyota, who wishes to not be named, concurs. While executives are putting a positive spin on the situation publicly, there is worry behind closed doors the new Prius is suffering from competition that may be more visually alluring or technologically advanced.
That includes plug-in hybrids such as the second-gen Chevrolet Volt, which can travel 53 miles (85 km) on battery power. The Prius has a smaller lithium-ion battery pack that assists, rather than substitutes for, gasoline power.
Breaking Away From the Egg?
Sullivan says the biggest factor in the new Prius’ lack of success is “the styling, (which) has maybe gone a little too wild for some people,” especially the mainstream-vehicle buyers who now make up the car’s U.S. owner base.
The new Prius’ look, described kindly as awkward thanks to its cow-horn-shaped headlights, has been decried by many in the industry.
While Sullivan doesn’t believe Tesla and its electric vehicles have had a significant impact on Prius sales, he says the upstart EV maker has shown green cars can be beautiful.
“The only thing Tesla has proved is people don’t care what the powertrain is. They want to buy it for the styling. That’s really, really important. There are people that are just gravitating toward the style (of the Model S). The want to be in one.”
Holdridge brushes off the notion aggressive styling may be negatively impacting Prius sales.
“We don’t think so. As a matter of fact that car has clinicked very, very well.”
It wouldn’t be the first time in U.S. automotive history that a car testing well in consumer focus groups underperformed at retail.
In 2009, Honda, citing positive feedback from consumer clinics, thought the second-generation Insight hybrid would sell in high volume. Kia’s Rondo multipurpose vehicle scored better in testing than the Mazda5 and Toyota RAV4. Only the RAV still is sold in the U.S.
Sullivan believes Toyota should have moved away from the Prius’ famous egg shape with the fourth generation, regardless of the aerodynamic benefits.
“There’s a stigma about a Prius and the styling. (With Toyota) the leader of the hybrid market, they had a chance to reinvent what the Prius means.”
Prius owners responding to a thread WardsAuto created on Priuschat.com, home to one of the Internet’s largest Prius forums, cite a variety of reasons why the newest iteration may not be seeing the early success its predecessors did.
Some say the third-generation Prius sedan represented a bigger technological leap from the model it replaced. Others agree Tesla and other battery-electric vehicles may be luring Prius owners, long some of the industry’s most loyal, to other brand showrooms.
Styling initially presented a problem for Priuschat forum member Jim from North Carolina.
Features he didn’t like, including “splayed” headlights, a rear-fender crease and blacked-out C-pillar, had him ready to purchase a ’16 Honda Civic.
But after taking a couple more test drives in the Prius, he was sold on its handling, materials and comfort. Opting for a Prius Four grade in a darker color and an interior applique kit in black minimized the unappealing design flourishes.
“The dark colors mitigated what I didn’t like about the exterior. The splayed headlights don’t look odd on darker colors, because the black border trim blends into the hood and bumper,” Jim says.
An out-and-out fan of the styling is Priuschat member Steve Cilurzo, a former BMW 7-Series owner from Carlsbad, CA. He tells WardsAuto he bought his first Prius this year partially because of the car’s technology, such as dynamic radar cruise control, but also because of the new generation’s “futuristic” looks.
“I thought the looks of the car were more sporty. To me it looks like they’re trying to appeal to a younger generation.
He “completely” gets people not finding the appearance appealing. “It’s a love-it or hate-it (look),” Cilurzo says.