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Toyota Prius sales pass Ford Explorer in US

From Finantial Times| January 11 , 2008 09:54 BJT

Americans bought more Toyota Prius hybrid petrol-electric hatchbacks in 2007 than Ford Explorer sports utility vehicles, the top-selling SUV for more than a decade.

The change of fortune, buried in US vehicle sales data for 2007 and unthinkable a few years ago, will find an echo at this year's Detroit auto show, which starts on Sunday.

While Americans' love for powerful gas-guzzlers remains strong, the slowing economy and high fuel prices are forcing buyers to lower their sights. Pressure on manufacturers to offer more fuel-efficient vehicles increased last month with a law requiring them to improve vehicles' average fuel efficiency by 40 per cent over the next 12 years.

While Prius sales soared 69 per cent in 2007, demand for the Explorer was less than a third of its 2000 peak. Many Americans are replacing truck-based SUVs with crossover vehicles, which are built like cars, thus offering a smoother ride and better fuel efficiency. Toyota began selling the Prius in North America in 2000, the same year Explorer sales reached a record 445,000 units.

"It's a combination of an ascending star and a falling star," says George Magliano, director of automotive industry analysis at consultant Global Insight.

The Explorer led the SUV charge in the 1990s to replace the minivan as the family car. Baby-boomers craving space, a protective cocoon high above the ground and the power of a V-8 engine have driven about 6m out of showrooms over the past 18 years. But filling an Explorer fuel tank now costs close to $70, against $30 five years ago. The traditional SUV "is a dead market", Mr Magliano says.

Toyota has pushed Prius sales hard in the past year, but in one respect, the car has become like most other North America vehicles - its sales have been buoyed by special promotions.

In Detroit, Ford will unveil a crossover vehicle, Explorer America - a signal that the traditional SUV's days are numbered. The Explorer America will come with a fuel-efficient engine and the eight-cylinder version will be dropped.

Toyota, Honda, Subaru, Saab and BMW are among other carmakers showing off new crossover models at the auto show. Ford will also be exhibiting a four-door version of its Verve hatchback.

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