Hybrid sales in the U.S. have flattened over the last couple of years, but they're going great guns in Japan.
Now, an analyst suggests that the great popularity of the Prius in its home market may lead Toyota to cut the price there to keep its sales high.
The Toyota Prius has been the best-selling car in Japan two years in a row, assisted by government incentives for the purchase of highly fuel-efficient cars that have now ended.
For many years after its launch, the Prius was viewed as a "leading edge" vehicle with highly sophisticated design and engineering. Those kinds of vehicles are usually rare, befitting their advanced technology.
But its popularity has moved it into a "friendly" role in Japan, meaning it now competes with such cars as the Honda Fit subcompact hatchback. And that may require Toyota to lower the price to keep sales up, especially in the absence of financial incentives.
2011 Toyota Prius
When it launched the third-generation 2010 Prius in the spring of 2009, Toyota cut its home-market price substantially to fend off a perceived threat from the 2010 Honda Insight. Honda's own dedicated hybrid has been a sales disappointment, finding only a fraction of the buyers that the Prius does both in Japan and in the U.S.
Toyota has cut costs aggressively. The hybrid system in the 2010 Prius cost 30 percent less than the previous generation, the company says, but it has even greater ambitions for its next Prius redesign: It wants to cut fully 50 percent out of the cost.
And that system will be spread across more Prius models. At the recent Detroit Auto Show, Toyota unveiled the Prius V hybrid station wagon, or "people mover," and the Prius C concept, pointing the way toward a smaller, compact-size Prius as well.
2012 Toyota Prius V launch press conference, 2011 Detroit Auto Show
Toyota now has the capacity to build up to 1 million hybrid-electric vehicles a year. With growing volume, it might be able to reduce Prius prices all over the world. The U.S. base price is now $23,050 for the lowest-level Prius II model.
With gas prices expected to rise over the next two or three years, a midsize hatchback that delivered mileage ratings of 50 mpg or better at a price under $20,000 could prove a winner in the U.S. market. Early this month, Toyota said it believes that by 2020, the Prius will be its most popular model.
What do you think? At what price would the Prius become the best-selling Toyota car in the U.S.?
Leave us your thoughts in the Comments below.