Green is Good: Is Toyota's luxury hybrid strategy a flop?

When Lexus launched its HS 250h last year, I was a bit befuddled. Why parent Toyota went to the trouble of stuffing the hybrid Prius’s Camry's drivetrain into the chassis of the European Toyota Avensis compact sedan (which less rear legroom than a Corolla), style it like a Lexus RX SUV, and price it like it was made of unobtanium, I never understood?

Costing between $39,900 and $48,750, the HS 250h has neither the style, room, comfort nor refinement of not only the existing $41,950 ES 350 gasoline model, but also the over $10,000 cheaper Prius.

Sure. The HS 250h may be what Toyota thinks is a new type of luxury car. It has the RX’s neat mouse-like centre console controller. And is rated at a combined 5.7L/100 km. But that alone doesn’t seem to be appealing enough to make an impression with new car buyers. In the all-important U.S. market—where hybrids have traditionally been most welcome outside of Japan—the HS 250h isn’t coming close to meeting Toyota’s sales expectations.

Through the end of April, Lexus sold only 11,228 examples since launching the HS 250h last August. In fact, only 4,529 units in 2010. Last month, only 1,076 units. Compare those numbers to Toyota’s initial HS sales goals of 20,000 to -30,000 examples per year. Or the Prius. It sold 12,555 units last month, and has sold 40,793 units since January.

And now it looks like Lexus is waving the white flag on the HS 250h.

“I think we underestimated the power of the Prius brand… And we overestimated what the market would look like based on gas prices. But if we can do over 1,000 units a month, 1,000-1,500 units a month, we feel really good about what we’re doing in the marketplace,” Lexus U.S. vice president Mark Templin told WardsAuto.

Do you think the HS 250h is merely ahead of its time? A victim of relatively low gas prices?

Or are customers smarter than what Lexus is giving them credit for?

[Source: Wards Auto]