Toyota executive: Prius shortage won't improve `until later this year'

This is off The San Jose Mercury News:

If you're in the market for a new Toyota Prius, you're probably in for a long wait. According to a report today from Bloomberg News, sales of the gas-electric hybrid were down in April, but that was because of a production shortage, not a decline in the vehicle's popularity.

``If I had the vehicles, we could do 250,000 this year,'' Jin Lentz, a group vice president at Toyota, told Bloomberg. ``We're going to end April with just a four-day supply of Prius, and I don't see that situation improving until later this year.''

Toyota sold 107,897 Prius sedans in 2005, Lentz said. In April, Toyota sold about 7,500 of the vehicles, down from 11,345 a year ago.

At least one analyst predicts that higher gas prices will fuel hybrid demand in the coming months. ``Fuel prices are going to play a role in overall hybrid demand,'' Alan Baum, of Birmingham, Mich., consultancy Planning Edge told Bloomberg. ``We're starting to come to the realization that the fuel price spike that we thought was seasonal is now becoming less so.''

Here in the San Jose area, the price of a gallon of regular unleaded gasoline reached another record today, at an average $3.25, according to the AAA auto club.

There are two aspects of this issue that I'm interested in. The first is that I would be curious to see what the relationship is between the rising fuel prices and the demand for the Toyota Prius. Looking at this, I'm reminded of the Arab oil embargos of the early 1970s. When gas prices went up in the early 70s, American consumers were driving Detroit iron, with big gas-guzzling V-8 engines. Nobody wanted to buy those tiny gas-miser Japanese imports. Right after the gas prices went up, Japanese car sales went up.

So now we appear to be back in the 1970s. American consumers have been addicted to cheap gas and big Detroit SUVs. While there are plenty of smaller, fuel efficient cars on the market today, fuel efficiency has not been at the forefront of Detroit's Big Three carmakers. Congress has allowed the CAFE fuel standards to remain laggard--especially the loopholes defining SUVs as trucks, rather than passenger vehicles, which have a lower mpg rating. General Motors, Ford, and Chrysler have been happily building high profit-margin, luxury SUVs for the soccer moms. Detroit never looked into the hybrid cars. Meanwhile, the Japanese auto makers continued investing into hybrid technology, providing autos with greater fuel efficiency. And lo--we have another period where gas prices have gone through the roof, where consumers are stuck driving big Detroit SUVs, and the Japanese car makers have new gas-saving hybrid cars in the market. And just as Detroit was behind in developing fuel efficient cars in the 1970s, Detroit is now behind in developing hybrid technology cars today.

History repeats itself.