Toyota reportedly cutting Prius price to match Honda Insight in Japan... will U.S. follow?
2010 Toyota Prius - Click above for a hi-res gallery
Toyota may have gotten used to being the leader in the hybrid sedan segment, but the Japanese auto giant didn't get to where it is today by failing to see the writing on the proverbial wall. With arch-rival Honda having priced its new Insight hybrid lower than the current Prius, Toyota is responding in kind by dropping its domestic market sticker price on the upcoming new Prius to match.
According to reports coming out of Japan, Toyota recently notified its JDM dealers that the price for the new Prius would be set at 2.05 million yen, which equates to about $20,750 in U.S. Dollars. On this side of the Pacific, the Honda Insight went on sale last month with a starting price of $20,470, putting the two on equal footing price-wise, while the Prius arguably brings more to the table with more space and better fuel economy. A fully-loaded new Prius can quickly reach above $30k, indicating that Toyota hopes to lure away buyers with the low sticker price in the hope that they go for pricey options. But in a double-pronged attack, Toyota intends to keep the outgoing Prius on the Japanese market at a significantly reduced price of 1.89 million yen ($19,130). Pricing for the United States has yet to be announced, but if Toyota follows the same model here as it reportedly has in its home market, the fight could get very aggressive.
Gallery: Detroit 2009: 2010 Toyota Prius
Gallery: 2010 Toyota Prius
[Source: Automotive News – subs. req'd]
Reader Comments (Page 1 of 2)
donniebyers 2:25PM (4/02/2009)
And so the hybrid price wars begins...
Reply
Sea Urchin 3:30PM (4/02/2009)
That is wonderful. This will only force companies to improve the product even more. It's called competition.
the vegas style guy 10:02PM (4/02/2009)
I still cant tell the difference between the two.
Sektor 2:26PM (4/02/2009)
Why these hybrids come in weird shapes?
Reply
Huff 2:29PM (4/02/2009)
They are shaped like that in order to be able to cut the air as efficiently as possible. Also, I believe that they are like that because a hatchback design allows them the most space in order to place the battery packs and still have a decent trunk.
Josiah 2:29PM (4/02/2009)
drag coefficient
Chris 2:29PM (4/02/2009)
aerodynamics
Sektor 3:04PM (4/02/2009)
Just because you can, doesn't mean that you should.
http://www.autoblog.com/2007/05/04/top-gear-crowns-weber-supercar-ugliest-car-of-2007/
That thing looks like that for 'improved aerodynamics'. Go figure.
jcar302 5:20PM (4/02/2009)
It is also said that they are designed this way to "look" like hybrids.
Because people that buy these cars want to appear conscious of the enviornment.
How true that is, i'm not really sure.
But i do know that there is other pretty decent hybrids out there, that look exactly like the non hybrid versions of the same model.
So i'm guessing there is at least a little truth to it.
Majarvis 2:28PM (4/02/2009)
Are the writers for Autoblog really this stupid? Did they forget that you can't just translate the price in Yen to USD and say it's on equal footing with the US-market price for the Insight. Talk about stunned...
Reply
Josiah 2:30PM (4/02/2009)
The point would be that if they're price matching in Japan, they may do the same in the US. I think the yen conversion is more informational than anything as everyone knows that never translates exactly.
Alex 2:31PM (4/02/2009)
So does this mean the Prius has been grossly over-priced for years?
Reply
dukeisduke 2:48PM (4/02/2009)
No, it's believed that Toyota has been losing money on each one, just to get market share. Of course there's yen manipulation, too, to artificially keep prices down.
Luis 2:59PM (4/02/2009)
Toyota lost money for years on each Prius it sold. A year or two ago they started turning a profit on them.
I suppose it could be argued that the profits Toyota made on 4Runners and Land Cruisers helped subsidize Prius sales for a while ;)
nardvark 3:06PM (4/02/2009)
Erm, they may have made a profit when gas was $4 a gallon, but I doubt they are now, since they are offering incentives on them, rather than gouging consumers and using tax credits as an excuse.
Luis 3:29PM (4/02/2009)
nardvark: You don't understand basic economics, do you? When the Prius was first developed, the technology was new and they didn't sell many of them, so of course they lost money on it (much like the Volt is an automatic money loser for years on end considering GM has plowed billions into it). It took 10 years for Toyota to start making money on their hybrid technologies, and now that they've reached economies of scale and costs to their suppliers have come down, they can turn a profit.
The price of gas only indirectly affects it in that it drives demand for fuel efficient cars. The current Prius is receiving incentives because sales are down from last year (20k/month to 9k/month) and a new model is coming out, so they are clearing out stock.
Regardless of the price of gas, Toyota will make a profit on each new Prius it sells.
What I don't hear are people defending Toyota from making a profit. I love how with cars everyone wants the company to not make any money, yet no one complains when they go to Best Buy and pay $1000 for an LCD TV that costs Best Buy $300.
Tourian 4:01PM (4/02/2009)
Well, I worked at Best Buy a long time ago and most of the tvs and computers aren't marked up much at all, sometimes they are losers. They hope you'll buy a service plan, tv stand, ink for your inkjet, cables, accesroies, blah blah, blah. Thats where they make their money. And Best Buy doesn't make the products they sell, so its not analagous to whats going on here.
Toyota has been accused of dumping the Prius on our market at a loss anyway, so it will be interesting to see what will happen now that a fellow Japanese company is the target rather then just them trying to crush the D3.
Judy Zik 10:02PM (4/02/2009)
Creative accounting. It all depends how many years you amortize the development costs of the Hybrid system over. I doubt it is actually selling for less than the cost of materials especially with most of them arriving loaded with extras. One could also make a pretty good arguement for a portion of those costs being considered marketing since being the Hybrid King has been great for Toyota's image.
This is a pretty agressive move by Toyota. The Insight seems to have been designed from the start to be a low cost alternative to the Prius. With both of them selling for the same price it is pretty obvious which one buyers will pick. I would bet Honda will call their bluff and cut the price on the Insight. Hopefully this does spill over to the North American market. The Hybrid premium is way too high right now.
Dustin 2:46PM (4/02/2009)
Well Toyota, I hope the hybrid "image" is worth it, because you're about to lose thousands of dollars on every Prius you sell. This from the company that lost billions of dollars last year. Good luck on that business plan, Goliath.
Reply
Bill E 2:47PM (4/02/2009)
Well I don't think that shape is necessary to achieve such a low CD, the new E class coupe beats the Prius' CD.
Reply