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Prius supply is down, prices up

01:00 AM EDT on Wednesday, May 14, 2008

By Alan Ohnsman

Bloomberg News

Toyota Motor Corp.’s Prius hybrid, the most fuel-efficient car sold in the United States, is getting harder to find on dealer lots and commanding higher prices when customers do.

It can take up to two weeks to receive delivery of the hybrid-electric vehicle, said Mark Harding, general manager of Toyota of Santa Monica, in Santa Monica, California.

“We’ve got some in stock at the moment, but we’ve also got a waiting list,” he said. “Supply is very tight.”

U.S. inventories of Priuses are limited by production capacity in Japan, which must be shared with Asia and Europe, said John Hanson, a Toyota spokesman in Torrance, Calif.

“This is a special vehicle, and as fuel prices keep rising, it gets more special,” he said. “Right now, U.S. customers can get a Prius. Next month or the month after that, it’s tough to say.”

U.S. dealer supplies of Priuses have dropped to the lowest level in two years, allowing Toyota, the world’s second-largest automaker, to pare incentives and raise prices, said Mike Michels, a Toyota spokesman in Torrance.

Toyota cut the value of sales promotions on the five-year- old model to $123 per vehicle in April, from $1,471 in March 2007, said Jesse Toprak, an analyst at Edmunds.com, a Santa Monica-based automotive Web site for consumers. Prius sales jumped 67 percent last month, fed by record gasoline prices.

Toyota said May 2 it planned to boost the base price of the Prius $400, or 1.8 percent, this month.

Currently, Prius sells for $25,274 on average, $869 more than a year ago, according to J.D. Power & Associates, a marketing data firm owned by New York-based McGraw-Hill Cos.

Toyota’s U.S. sales, down 3.3 percent this year through April, are heading for the first annual decrease since 1995. By contrast, Prius deliveries are up 23 percent in 2008, to 64,664 vehicles. Already the world’s best-selling hybrid, Prius was No. 8 in U.S. passenger-car sales through April, its highest ranking.

Incentives for the Prius that were eliminated include low- interest rate financing, discounts on accessories, and above book-value offers for customer trade-in vehicles, Toprak said. Now there’s no incentive support for the model, Toyota spokesman Michels said.

Prius inventory is at the lowest level in the U.S. since 2006 as rising gasoline prices and a sluggish economy stoke demand for fuel-efficient vehicles.

Dealers’ supplies aren’t likely to rise this year, as Prius production is constrained by the availability of battery packs, Michels said.

“That supply of batteries has to be shared with other products, like Camry Hybrid, which is also up a lot this year,” he said. The hybrid Camry sedan posted a 37 percent jump in U.S. deliveries through April, to 21,479 cars, based on figures reported by Toyota.

The car gets 46 miles per gallon in combined city and highway driving, the best fuel economy of any model rated by the U.S. Environmental Protection Agency. Toyota’s similar-sized Corolla, a conventionally powered vehicle and the best-selling small car in the U.S., gets 29 miles per gallon.