Archive for April, 2011

Bay Area Prius Prices Rising Fast

As predicted, limited Prius production in Japan combined with increased demand caused by surging prices at the pump has led to premium pricing on Prius (try saying that three times fast).

According to sources within the company, Toyota manufacturing plants in Japan are working at 50 percent of capacity due to limited parts availability.   As a result, Bay Area dealers report deliveries of new cars are down as much as 80% from normal.

Meanwhile, sales are up as high gas prices spur drivers to switch to more fuel efficient vehicles.   As a result, new Prius are being sold faster than they can be replaced.

With shrinking inventories and strong demand, most dealerships in the Bay Area have marked up the price of new Prius to MSRP or higher.   Even so, shortages in some packages and colors are starting to occur.

The situation is likely to worsen over the next few months, especially if gas prices keep rising.   Many fuel efficient cars are either made in Japan or rely on parts that come from Japan.   Experts are predicting shortages in key parts and limited vehicle production through the summer on many car models.

The long buyer’s market for the Prius is over for now.

Toyota recently announced that production of new Prius had restarted after outages caused by the earthquake and tsunami two weeks ago.   Does this mean that everything is back to normal for the new car market in the Bay Area and Northern CA?

Hardly.  One of the plants that makes the special hybrid battery for the Prius sustained heavy damage and remains offline.  Other parts are in short supply.  And infrastructure and fuel problems continue to effect production.

Bottom line, production of new Prius in Japan will be limited for the foreseeable future.  Parts shortages will have an increasing effect on U.S. production of other models of Toyota as well.

The sudden tightening of supply in the face of growing demand has caused prices to firm and inventory to become scarce.  We’re still brokering new Prius in all packages and colors at MSRP pricing.  This is $1000-$1600 higher than it was just three weeks ago, but so far we are still able to fill most orders.

Toyota incentives remain in effect as of this writing:  $500 rebate or 2.9% financing.  This deal is scheduled to expire April 4th.  We’ll see if Toyota renews it.