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Report: Toyota Will Cut Price of Existing Prius to Counter Honda Insight

The Nikkei reports that Toyota Motor Corp. plans to lower the price for the existing Prius hybrid when it begins selling the more fuel-efficient third-generation Prius (earlier post) later this year to counter Honda Motor’s new Insight hybrid (earlier post).

Japan’s top automaker will continue to sell the existing Prius after the new version’s release in May. While the new Prius, which will boast improved fuel-efficiency, is expected to carry a hefty price tag, Toyota plans to cut the price for the current model to around 2 million yen. Rival Honda is slated to release the Insight hybrid in February, with a starting price of less than 2 million yen.

The new Prius will come equipped with a 1.8-liter engine, compared with the current 1.5-liter version, improving the car’s fuel efficiency 10% to 36-40km per liter. With this improvement, the price is expected to rise to around 2.5 million yen. The remodeled Prius will be offered through all four of Toyota’s sales channels while the existing version will be sold only through two.

Toyota will position the current Prius as a low-end model targeted at corporate users, simplifying the interior design to lower its price.

Sales of the Prius in Japan in 2008 rose 25% from 2007, to more than 73,000 units.

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