With increased competition and unexpectedly high sales on the new 2010 Honda Insight, Toyota announced that they are considering lowering the price of the 2010 Prius in Japan.
Toyota previously stated that they did not see the new Insight as competition to the Prius. Noting that the Prius is larger and more upscale with more advanced hybrid technologies than the Insight. Toyota execs previously had stated that both vehicles could share the market. However, Toyota's view now appears to be changing.
Toyota now talks of releasing a base model Prius that can compete in the same price category as the new Honda Insight. Initially, the cheapest Prius was expected to sell around $22,700, but with the Insight undercutting that price and selling at a base of $19,800, Toyota is responding.
Toyota is openly discussing price cuting options due to high sales volume of the Insight. Honda has sold or taken orders for 18,000 new Insights in its first month of production in Japan. A sales number that is significantly higher than Honda anticipated. The current Insight undercuts the price of the Prius by about 18% in Japan.
Toyota, in a bold move towards a price war, wants to price their Prius to cut into the sales of the Insight.
Source: Japanese Newpaper Yomiuri Shimbun, Edmunds.com
