Toyota will increase the production rate of its new compact version of its Prius hybrid in order to meet Japanese demand that may be 10 times that of its current supply, Green Car Congress reports, citing the Japan-based publication Nikkei.

The world's biggest maker of hybrids will increase production capacity for the Aqua – known as the Prius C in the U.S. – within the next three months, the website said, citing a Nikkei interview with Toyota Senior Managing Officer Takeshi Shirane. The executive said that Toyota may produce the Aqua at Central Motor's factory in Miyagi Prefecture. Central Motor is one of three companies being merged into Toyota Motor East Japan Inc. this summer.

Earlier this month, Hybrid Cars, again citing the Nikkei, reported that Toyota received about 120,000 orders for the Aqua from Dec. 26 - 31, the first days the car was available to the Japanese public. Toyota, which targeted sales of 12,000 Aquas a month, had already gotten about 60,000 pre-orders for the model. Toyota recently told us it has capacity to make 30,000 Prius C hybrids a month.

Last week, Toyota said its base-priced Prius C will be $18,950, though with its destination charges and other options, fully-loaded versions can cost more than $23,000. Toyota estimates that the car, which goes on sale next month, will get 50 miles per gallon combined (53 city/46 highway), making it the most fuel-efficient non plug-in sold in the U.S. Toyota, whose standard Prius gets 50 mpg (51 city/48 highway) combined, recently started selling the Prius V wagon and will introduce a plug-in hybrid Prius later this year.

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