With recent pricing announced on the new Honda Insight starting at around $19,800, Toyota has decided to offer a lower priced hybrid to compete directly with the Insight.

Rather than only offering the higher priced $22,000 new Toyota Prius, Toyota has decided to develop a new model to compete with the Insight.  Toyota cites an expected price for their new hybrid model of around $20,510. 

This new hybrid model is expected to go on sale in 2011 in Japan and will offer significant competition to the Honda Insight.  Previously, Toyota seemed to show little concern that the new Insight was coming to market.  Toyota previously had stated that both vehicles appeal to different buyers and that both vehicles could produce high sales volumes and would not be considered competitve vehicles.

Toyota's new hybrid now appears to offer a competitve vehicle in the same segment that the Honda Insight occupies.  Toyota plans to price the new model between 20 and 30 percent cheaper than the all new Prius.  The new model will be smaller in size than the Prius and also use a smaller engine.

No word yet if this vehicle will be available in the states, though Toyota does hint that sales may expand overseas.

Source: Reuters