The Toyota Prius is the best-selling hybrid vehicle of all time and recently passed three million sales globally and a million in the U.S., over more than a decade. And when fuel prices rise, so has demand for the Prius and other high-mileage vehicles.
So then, why hasn't it for the Honda Insight? Ever since its introduction more than two years ago, the Insight hasn't been able to find the same traction in the green-car market.
While the Insight has a shape that's nearly as distinctive as that of the Prius, fuel economy might be one of the key reasons: While the Prius comes with EPA ratings of 51 mpg city, 48 highway, the Insight has ratings of 40/43. While excellent, they're not superstar territory and in the same league as the Prius to many shoppers—even though we've seen real-world numbers with the Insight that are much better than the EPA's.
Last week, Ward's reported that sales of the Insight for March were up more than 62 percent versus year-ago levels, to 2,782 units. On a percentage basis, that's a bigger increase than the 52-percent increase of the Toyota Prius, year over year, but, but the Insight's first-quarter sales of just over 6,000 are only a small fraction of the nearly 43,000 Prius models sold during the same period.
So far, an underachiever
Honda's original goal for the Insight around launch time was 200,000 per year globally and 90,000 annually for the U.S., but in the model's first calendar year (March 2009 through February 2010), it sold just over 130,000 worldwide and in each of its two years on sale has sold just over 20,000 in the U.S.
Transaction prices for the Prius, meanwhile, have soared—from about $300 under dealer invoice a little over a month ago, at the time of the March 11 earthquake in Japan, to slightly over MSRP about a week ago. That's a $2,000 price increase in just over a month.
Gas prices are continuing to climb, too. The current national-average pump price of a gallon of regular gasoline stands at $3.82; that's only about three cents higher than last week, but nearly 30 cents higher than a month ago and 65 cents higher than two months ago, according to figures from GasBuddy.com.
No geek factor, yet well left of mainstream
2011 Honda Insight
The Insight has never quite competed with the Prius in several key areas: Its backseat space is more limited, particularly in headroom; some think it doesn't ride nearly as well as the Prius; and the Insight doesn't offer nearly as many high-tech options as the Prius—like lane-keep assist, adaptive cruise, and automatic parking. In other words, the Insight doesn't quite have the geek factor, yet the mainstream market never found it.
Pricing, of course, is the other issue. Toyota ended up positioning and pricing the redesigned 2010 Toyota Prius, which came out a few months after the Insight's launch, considerably lower than expected, which for shoppers only looking at the EPA fuel economy figures meant the Insight didn't look like as strong of a deal. Honda did however roll out a more affordable version in the 2011 Insight.
But, as we reported last week over at The Car Connection, there are more factors this time that could lead to an especially tight market, with transaction prices on many small and high-mileage cars expected to surge through much of this year.
Pace picking up, but supply probably not ready to step in
And the long-overlooked Honda Insight is now starting to move off showrooms and lots at a faster rate. Last week, TrueCar told The Car Connection that the Insight is one of several cars that the company is already seeing in tight supply, with higher transaction prices expected just around the corner.
Of course there's one big question: If Honda's other Japanese-built vehicles are affected by the supply issues, the Insight will, too. So while small cars might move faster for a while, what's already on lots will just go a little faster. That's good for dealerships, but not good for hybrid buyers, and probably not even good for Honda.
Will it lead more people to discover the Insight—or at least find some happiness in its compromises? Would more people consider it with gasoline at $5 a gallon? Let us know what you think.