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Toyota reaches the limit of 60,000 hybrids; buyers to expect lesser tax credit

Florida’s Courtesy Toyota finally has the Prius on their lot and guess what? It’s now available for test drive. This is the first time actually in three years that the Toyota dealer has offered such promotion. According to Mike Hughes, Courtesy’s General Sales Manager, "Up until the last three or four weeks when Toyota has upped production on the Prius, we had a waiting list for a solid three years. At its longest point, the wait was nine months."

Meanwhile, the Montpelier-based Toyota dealership has all the supply that they need but it seems like the demand for Prius has dwindled caused probably by the declining gas prices, lower tax credits and well maybe people just don’t have the cash anymore.

Sales of hybrid cars like the Prius have experienced its peak when gas prices reached an unbelievable a gallon. During that time there were about 32,000 hybrid cars sold and then plunge to 19,000 in November according to CNW Marketing Research when prices of gas has dropped. The never ending fluctuation of gas prices is seen by Kevin Bowie, General Manager of Shearer Honda in Rutland as an opportunity for the hybrid industry, "For people in general, I think their awareness has been raised that this can be a very big expense very quickly. People that are buying hybrids are aware that we could go right back to that again," he reportedly said.
It should be noted that the federal government has offered credit taxes to encourage people to purchase hybrid vehicles. Toyota was one of the companies that benefited from the tax credit incentive however new set rules on the credit taxes are now affecting the sales of Prius.

Before Oct. 1, 2006 buyers who chose to purchase one of Toyota’s Hybrid models like the Camry and Highlander received ,600 credit for their tax returns while ,150 tax return credit was provided for Prius buyers. However federal government new rules set a limit of 60,000 hybrids per carmaker to enable customers to receive the full tax credit. Unfortunately for Toyota since it has already reached the 60,000 hybrid car limit which means that its customers will no longer be entitled to the full tax credit. But there would still be tax credit to be given to Toyota hybrid customers but this time only 50%.

The quick turnover of Toyota’s hybrid vehicles was believed to be the result of high demand but limited supply. This explains why Toyota compared to other automaker has been able to quickly reach the 60,000 limit for hybrid cars. As matter of fact according to Mike Hughes, Courtesy’s general manager, "The Camry Hybrid has been on the market for five months, so there's really limited availability. Typically they're pre-sold before they come in."

Hybrid vehicles are the only ones affected by the new rules and would have no adverse effect on the sale of Toyota parts.

About the Author: Mark Clarkson is a 35 year old marketing consultant for a leading auto parts store. This native of Denver is also an offroad enthusiast.

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