May 18, 2009
Toyota Sets Its Sights On Honda With New Prius
Toyota Motor Corp unveiled the newest model of its Prius hybrid in Japan on Monday as it sets its sights on rivaling Honda Motor Co's newly introduced Insight.
Last month, the Insight became the first hybrid vehicle ever to top the best selling list in Japan.
On Monday, Toyota Executive Vice President Akio Toyoda showed off the newest edition to the company's Prius hybrid line. The third-generation Prius is also expected to cost about $3,000 less than previous models.
Toyota announced it has received more than 80,000 requests for preorders in Japan. It expects to sell 10,000 vehicles each month.
"We lowered the price to appeal to a broadening customer base," said Toyoda.
The new Prius was first features at the Detroit auto show in January, and is expected to be available for purchase in North America and Europe later this month. It gets a combined 50 miles per gallon, a small improvement over 46 miles per gallon for the 200 model.
"The hybrid market is going to be one of the fastest-growing segments in the world," JPMorgan Securities auto analyst Takaki Nakanishi told Reuters.
"With the global economy in a recession, luxury and large cars are not selling but fuel-conscious cars are in fact growing. Toyota's earnings performance is hurting right now, and they can't afford to lose the lead in this market," he said.
Toyota has set a goal of selling 400,000 Prius models in 2010.
According to BBC News, Toyota announced that it had sold 1,028,000 Prius cars worldwide as of the end of April. More than half of those sales were in North America.
JPMorgan Securities predicts about one in every 10 cars on the road in 2018 will be a hybrid as more brands begin to release their own models.
The new Prius is being introduced at 2.05 million yen ($21,620), which reflects Toyota's move to compete with rival Honda Motor Co's Insight.
Honda sold almost 10,500 Insight models in Japan in April alone.
Toyota's price change move makes the Prius now available at the same price as the Insight.
"You can't just suddenly change your pricing policy -- that's going to destroy the market," Honda's Chief Executive Takeo Fukui told Reuters last week.
"We're not paying any attention to (the Prius). They're not going to last long with that strategy," he said.
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