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Four New Realities of the Green Car Market in 2011

Published April 25, 2011

Sales figures from this year’s auto market are emphatic: Full-size SUVs are out and hybrids are in. Baum and Associates, a Michigan-based auto analyst firm, reports an annual jump in sales in March 2011 that is three times higher than the increase in the overall car market since one year ago.

Sales gains between March 2010 and March 2011. *Very small cars include products such as the Ford Fiesta, Nissan Versa, and Honda Fit. (Source: Baum and Associates.)

“Consumers want hybrids, small cars and crossovers, and are shying away from pickups and truck-based SUVs,” said Alan Baum, principal of Baum and Associates (and a partner on the HybridCars.com monthly sales dashboard). “The bottom line is that automakers and consumers will move forward on all fronts based on corporate and consumer needs. Hybrid and electric vehicles are a part of the solution, as are more efficient powertrains throughout the vehicle fleet.” He characterizes the trends as a “shift,” rather than a “wholesale change.”
Baum identifies four major trendlines in the shift to greener vehicles.

1. Growth in highly fuel-efficient vehicles far outpaced the rest of the market.

   In the first quarter of 2011, hybrids increased sales by 33.9 percent, while the overall market grew by 20.2 percent. In March, small cars— such as the Ford Fiesta and Honda Fit—grew at almost twice the rate of the overall market, 30 percent compared to 17 percent.

2. Cars are back, with fuel-efficiency as the main driver.

   Car sales grew a third faster than vehicles that are characterized as or look like SUVs. The growth of cars is most obvious in March as the impact of gas prices had a significant impact.

3. Small car-like SUVs outsell Big SUVs.

   Growth in the market for what some people call “SUVs” was actually driven by small, fuel-efficient crossovers. In contrast, “true” SUVs built on truck frames continued to lose market share, which now stands at less than 7 percent of the market, the same market share as the most efficient part of the market, including hybrids, clean diesels, and very small cars.

4. Hybrids and small cars are even bigger in the used car market.

   The increase in the value of a three-year-old Toyota Prius from January to April 2011 exceeds all other vehicles, making clear the demand for this model in both the new and used vehicle market. Small vehicles such as three-year-old versions of the Toyota Corolla, Chevy Cobalt, Ford Focus, Honda Civic, and Nissan Versa exhibit strong gains in value, as compared to the overall used vehicle market. The three-year-old Ford Explorer brings up the rear, and this of course refers to the previous version of the Ford Explorer, which is a traditional “truck-based” SUV.

More info and a full set of comparative sales data (PDF) is available on the Baum and Associates website.

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