Honda's new Insight went on sale in hits homeland about a week ago, and already it's under attack. Before it hit the market, there were rumors that it would be much cheaper than the Toyota Prius. Toyota, however, has other ideas. The Insight is 1.89 million yen ($18,853 USD) in Japan, which is the same price as the current Prius. Toyota then priced the coming third generation Prius at 2.05 million yen ($20,437 USD) to keep it close to the Insight. Then Toyota said it would keep the second-generation Prius on sale in Japan, and there have been rumors that Toyota is also working on a cheaper Prius costing around 30% less than the current one. That would pit three Prius models against one Insight, all similarly priced.
In response, Honda CEO Takeo Fukui said Honda will not lower the price of the Insight. Said Fukui, "I think that is something we can't do right now. We have to carefully examine the new Prius to know whether it is necessary for us to take certain measures. We have to think about the balance between cost and effectiveness." If Toyota does come out with three Japan-market Priuses, Honda will be thinking long and hard about those issues.
Unlike Toyota, though, Honda does have the CR-Z hybrid coming, which could give Honda some sporting hybrid credentials that Toyota doesn't yet have. Honda also said it is expanding its research and hybrid push into large sedans instead of counting on clean diesels for its bigger cars. Fukui feels that clean diesels are too expensive to develop be practical.
[Source: Automotive News, sub req'd]