Toyota Prius sales pass Ford Explorer

The icon of America's SUV passion falls victim to stubbornly high gas prices and an increasingly stringent regulatory climate.

By the Financial Times

Americans bought more Toyota Prius hybrid gas-electric hatchbacks last year than Ford Explorer sport-utility vehicles, the top-selling SUV for more than a decade.

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

While Americans' love for powerful gas guzzlers remains strong, a slowing economy and high gasoline prices are forcing buyers to lower their sights.

MSN Autos: Detroit auto show preview

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% over the next 12 years.

While Prius sales soared 69% last year, 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 Motor (TM, news, msgs) began selling the Prius in North America in 2000, the same year Explorer sales reached a record 445,000 units for Ford Motor (F, news, msgs).

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

An icon faces big challenges

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 6 million Explorers out of showrooms over the past 18 years.

But filling an Explorer fuel tank now costs $70 or more, up from $30 five years ago. The traditional SUV "is a dead market," Magliano says.

posted to ClimateConcern