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Gas-Sippers Sucking Wind As Year Ends

Wednesday, 20 Dec 2006 | 1:05 PM ET

The days of the red-hot hybrid are over. You remember those days (last summer) when dealers couldn't keep hybrids in stock because high gas prices pressured nervous buyers to pony up for a fuel efficient car. Fast forward five months, and not only is it easier to find a hybrid, but you can even get a deal on one.

The latest study from the research firm, CNW Marketing, shows that the number of car buyers considering a hybrid has dropped to it's lowest point since August of '05. In the first half of this month, according to CNW, 11.6% of buyers indicated an interest in driving off with a gas-electric hybrid. That's a big decline from this time last year, when three times as many buyers thought about picking up a hybrid. Not only that, but the average premium buyers who are willing to pay for a hybrid compared to a comparable gas model, is at it's lowest point since CNW started measuring buyer attitudes on hybrids. The average price premium is now $1,152 - less than half what it was a year ago.

Why the change?

Gas prices are the biggest reason. When they were surging toward $3.00 a gallon, buyers cried uncle and scrambled for hybrids. Even if it cost a couple grand more than a comparable model, buyers were willing to pay for the hybrid. But now, with lower gas prices, there's less demand. And when you consider, there are a slew of new subcompacts (Nissan's Versa, Honda Fit, Toyota Yaris) getting excellent mileage for a low price ($11,000- $14,000), many buyers have decided hybrids aren't so hot.

What we're seeing is what many in the auto industry have predicted for some time: gas-electric hybrids will make up a small market in overall industry sales. Some predict hybrids will stay under 5% of total vehicle sales for years to come. There will still be some hot models, like the Toyota Prius. But increasingly, expect automakers to sell hybrids as just another powertrain platform, like ethanol E-85 or diesel models.

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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