Toyota says hybrid sales will be lower in 2008 than 2007, not because people don't want them, but because Toyota simply can't make any more. Bob Carter, general manager of Toyota Division, told Ad Age, that Toyota sold 181,000 Priuses in 2007 and that's simply the best they can do right now: "We can't repeat that [181,000 Prius sold in a year], no way, even though the demand may be there. We just can't keep up. So you will see much more moderate growth because of the supply," Carter said.

Carter then added something ominous: "We are very committed to hybrids but it's not our position that hybrid is the solution to the future." He continues with, "We're looking at high-efficiency gasoline, clean diesel, fuel cells and the plug-in hybrid" which is a little more comforting. Toyota has said battery production is a hurdle for the introduction of plug-in cars. Batteries may be keeping more hybrids from reaching customers as well. Carter (and Toyota's Jaycie Chitwood) described Toyota's plans in great depth with ABG recently.

So, Toyota, the #1 maker of hybrids is saying that, while there is hybrid demand, they have reached the limit of production. For everyone who wonders why hybrid market penetration can't go above a certain percentage of car sales, there's your reason. We've done your part and driven up demand, but apparently more work needs to be done to be able to make more hybrids.

January is usually not a big month for car sales. This year, the New Year doldrums hit hybrids as well as the larger car market. Sales of all vehicles—hybrids included—were down by approximately 25 percent compared to December. But if we compare this month to January of last year, a familiar trend emerges: hybrid sales grew by 25 percent while the overall market declined slightly.
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Exactly where the economy is headed, and the impact the general economic climate has on hybrid shoppers, remains to be seen. So far, year-over-year sales performance hints that some hybrid models may be recession-proof. The Toyota Prius, for example, grew 37 percent compared with last January—not bad for a four-year-old model that is nearing its next redesign. Other well-established and generally fuel-efficient hybrid vehicles—Camry, Highlander, and Escape—also seem less affected by recessionary pressures. But less fuel efficient models, such as those from Lexus, took a beating this month, indicating that hybrid and luxury are not a winning combination particularly in a lagging economy.

UPDATE: Toyota responded by clarifying that Mr. Carter's quote was misinterpreted. The automaker can and will, in fact, produce more Priuses than it did last year. What it likely won't be able to do is match or exceed the rate of growth Prius production had in 2007.