With 80,000 pre-orders, the all new 2010 Prius is putting the heat on the Honda Insight as it launches today in Japan.

Toyota, the world's leading producer of hybrid vehicles, is aiming to take back its top spot from Honda as the Insight was the best selling vehicle in Japan for the month of April.  Will Honda remain on top, or will Toyota regain its dominance in the segment?

With rising fuel costs and a cost conscious buyer, the hybrid segment has been heating up.  Although overall sales volumes for vehicles are down, hybrid sales are indeed up and Toyota is hoping to take advantage of the current situation.

According to JP Morgan Auto Analyst Takai Nakanishi, "The hybrid market is going to be one of the fastest growing segments in the world.  With the global economy in a recession, luxury and large cars are not selling, but fuel conscious cars are in fact growing.  Toyota's earnings performance is hurting right now, and they can't afford to lose the lead in this market."

Another potential problem may be looming for Toyota as pre-orders have exceeded their anticipation and their production capabilities.  With anticipated sales at 10,000 units per month and 80,000 pre-orders already lined up, Toyota may take months to catch up.  Though they foresee selling 400,000 units worldwide in 2010, early indications may point to even higher demand than Toyota is capable of supplying.

The company has lowered the price of the new Prius to appeal to more buyers and to better position themselves to compete with the bargain priced Honda Insight, but in doing so, they may have under anticioated the actaul volume of buyers they will have and now must race to catch up with the increased demand.  Some predict the initial pre-order of 80,000 may back log Toyota for 10 to 12 months.  We will have to wait and see if Toyota can take advantage of the outrageous demand for the new Prius.

Source:  Reuters