Friday, February 17, 2017

One Is The Loneliest Number

So this happened...
Yes, you read that right, one.

I know, I know. This makes no damn sense. How can a country of more than 1.3 billion only manage to buy one Prius? Well, it's a mystery to the author of this article, at least in the upper paragraphs...
Chinese consumers have never warmed to the Prius, a mainstay of the U.S. green-car movement. This past year, sales almost completely flatlined, even as China’s cities continue to battle smog issues. 
One Prius was sold in the country in December, the first sale since May. In total, Toyota sold 76 Priuses in China last year, compared with about 700 in 2015, according to dealer data compiled by Bloomberg Intelligence. 
“As far as the Chinese are concerned, it just doesn’t look very good,” said Steve Man, an automobile and industrial sector analyst with Bloomberg Intelligence in Hong Kong. 
Man said the Prius is a unique car that stands on its own and doesn’t fit into any familiar categories for consumers in China. As a result, its sales have been undercut by Toyota’s far more popular Corolla and Camry models, which have a reputation for being high-quality vehicles among consumers there, he said. A shift in Chinese tastes away from sedans and toward more spacious sport utility vehicles hasn’t helped either. 
The Corolla and Camry are among the most popular models in China, “so a lot of the Chinese can relate to them,” Man said. “For a similar price, they would opt to buy the Corolla and the Camry for the strong brand recognition they have.” 
So they love Camry and Corolla but hate the Prius because of its looks? And somehow the Prius reputation for quality isn't the same as Camry or Corolla? This is really weird.
Toyota also markets gas-electric hybrid versions of these models in China. The company sold almost 47,000 Corolla and Camry hybrids last year, making up 65 percent of its total Chinese hybrid sales, the data show. In all, Toyota sold a record 71,676 gas-electric hybrids in China in 2016, an eightfold jump from the previous year and at least the eighth straight annual increase, according to data compiled by Bloomberg.
Wait, 47K hybrid Camrys and Corollas and only one Prius. This really doesn't smell right.

And then...
Toyota stopped producing the Prius in China in 2015, which means buyers of the cars are subject to the 25 percent customs tax slapped on imports. An imported Prius hybrid starts from 229,800 yuan ($33,455) to 269,800 yuan. For a similar price, you can buy an Audi Q3 SUV.
Ah. I see now. So Toyota isn't even really selling the Prius in China and if you demand one, it's ridiculously expensive. Toyota just went through this in India where the same issue applied. It had nothing to do with quality, performance or appearance. It had everything to do with price and availability.

And the coda...

Toyota began selling its new Prius plug-in hybrid, or PHV, in Japan this week, and plans to start sales in Europe in March. The company doesn’t intend to market the model in China.
“We’ve only just started production of hybrid vehicles in China, so we’re making the utmost effort to popularize those vehicles,” Toyota Chairman Takeshi Uchiyamada said at a Prius event in Tokyo on Wednesday. “When the timing is right, we will consider introducing the PHV in China.” 

And in the end, I think, Toyota's lack of support for Prius in these place such as China is the real reason why they're not selling. It has little to do with other factors and everything to do with, you can't buy it without a struggle and without paying a ridiculous price. Why Toyota chooses to do this is beyond me. Someone has a spreadsheet, I'm sure that justifies this but it's odd to me. As I've said about Toyota's rather cavalier handling of updating Prius, their hubris is going to come back to hurt them and Toyota will find how difficult it is to rebuild a brand after abandoning it.

Source article by Eric Lam from Bloomberg reprinted and extended by the Japan Times.