Toyota Prius Sales Predicted to Fall Due to Expiration of Subsidies (Video)

[ Toyota Orders in Tumble in Japan – NTDTV ]

Toyota Motor Corp.’s Prius’s wave of strong growth may slow due to the expiration of Japanese government subsidies, which could lead to higher prices for consumers.

“A collapse in sales is unavoidable,” said Hiromi Inoue, the new-car sales chief for Tokyo Toyopet Motor Sales Co., according to Bloomberg. “The daily pace of orders for the Prius is already dropping. We are bracing ourselves for the coming crisis.”

In the Japanese domestic market, overall car sales are expected to fall 23 percent, based on data from the Japan Automobile Dealers Association. Bloomberg reported that customers looking to purchase a Prius in Toyopet’s 66 showrooms have dropped to about eight a day from 20 in June, Inoue said.

The inevitability of a drop in sales in Japan will likely follow a similar trend that occurred with subsidies ceasing to exist in Germany and the United States.

In Germany, total subsidies were up to $6.4 billion for buyers of new vehicles who traded in their old cars, which helped increase sales by 23 percent in 2009, according to the VDA auto industry association—when the support subsided, new car registrations in the country plummeted 29 percent for the first seven months of 2010, according to the association.

The U.S. pattern was similar to Germany’s, where the government provided $2.88 billion in rebates in 2009 encouraging consumers to trade their existing vehicles for more fuel-efficient models—the “cash for clunkers” program—resulting in around 700,000 sales. Toyota’s share of this growth was more than 19 percent.

Toyota’s U.S. sales dropped 3.2 percent to 169,224 vehicles, and Prius sales also fell 26 percent to 14,102 in August compared with 2009 figures.