The Honda insight was a warning shot fired to Toyota was ready to become a serious player in the hybrid market. Billed as the “Hybrid For Everyone”, it no doubt stole Toyota’s thunder, becoming the best-selling vehicle in Japan, the first hybrid to take that title.

Needless to say, Toyota was alarmed.  An affordable hybrid was Toyota’s trump card. The company heavily invested in Hybrid Synergy Drive, and it requires continued volume to help bring the costs down.  We still don’t know whether or not the system is profitable.

In response, Toyota then lowered the Price, undercutting Honda’s attempt at offering something different through pricing. Unsurprisingly the market responded favorably, with a large amount of the preorders for the vehicle booked. In a choice between Insight and Prius, the latter is the obvious choice.

Other then price, what does the Insight have going for it?  The results don’t lie; the Prius has unseated the Insight as best-selling vehicle in Japan with 10,915 units sold. Meanwhile the Insight drops to third, following Honda’s Fit subcompact.

I guess that might not be the case! After the price cut, the Insight reign as number 1 may not last long, considering these numbers coming out of Toyota. I wrote an article recently stating that Toyota was expecting 40,000 preorders for the Prius when all was said and done.

Well they blew past that estimate!  Japanese newspaper the Nikeii is reporting 75,000pre-orders for the car! That is an incredible figure for many reasons. The Prius sold 73,000 units last year.  That means Toyota has more pre-orders for the car than it sold last year entirely!  Not to mention this figure is far more than the pre-orders that Honda garnered with the Insight (21,000).

It will be interesting to see this war being played out between the two, and if it will carry over into other countries as well. The Insight has forced Toyota to lower the price on the Prius, which is a much better vehicle (in my opinion at least). So one thing is for sure, competition like this can only be good for the consumer.

The Fourth Quarter is when everything turned really bad; Lehman Brothers, AIG. The whole September stock market crisis and the $700 billion bailout is when things took a dramatic turn for the worse. So naturally, that is when the companies would be posting their largest losses.

Ford for instance wants you to compare it’s latest results from the cash burn in Q4, saying that it shows a huge improvement from the losses they were showing then. Ford’s Q4 was disastrous, to the tune of $5.9 billion.

Apparently Honda’s Fourth Quarter business cycle ends on March 31st. Other companies are reporting First Quarter but Honda is reporting fourth now….interesting. The loss comes out to $2.91 billion for the last quarter, but over the company’s 1 year business cycle (ending on March 31st) they still managed to eke out a small profit. That’s impressive; Honda is doing a lot better then it’s other automakers.

While competitors Toyota and Nissan are both expecting continued losses for the year 2009, Honda expects to make a small profit, similar to the case in 2008. The company’s motorcycle business is helping soften the losses in the automotive unit as well; motorcycle sales were up 8.5 percent.  

“In North America, I think we have hit the bottom, but it’s still uncertain how we can rebound,”says Honda executive vice president Koichi Kondo.

I do think we have hit bottom in the automotive sector and that the recent injections of stimulus have to produce some kind of effect, whether it’s as big as intended or not. In addition, the realities of the economic cycle indicate that normal business activity resumes over a period of time. I don’t know about you, but I can’t wait until things improve and the anxiety over our economic future ends.

Unlike Toyota and more recently Honda, which are both very wedded to the hybrid powertrain system, Nissan will be skipping out on launching a low-cost hybrid to compete. They’re bypassing all of that, moving straight to electric vehicle technology. Toyota is hesitant to go to pure electric vehicles due to it’s heavy investment in the Hybrid Synergy Drive system. So expect that and variations of it to be Toyota’s dominant technology in the future.

Nissan Senior Vice President Andy Palmer told Automotive News that EVs are a “more persuasive technology”. He said that’s where the company is directing it’s efforts and that especially with small cars “it’s clear we’re going to make the EV happen”.

That comes as really good news for electric-only fans out there. Nissan is working to collaborate with electric utilities and companies to develop a charging infrastructure. That news will work to the advantage of Nissan in getting the vehicles sold, as well as others like Tesla and GM with the Volt. Part of that investment includes an “electric corridor” connecting the Pheonix and Tuscon Metro Areas with charging stations.

The only hybrid Nissan currently has on sale is the Altima, with the hybrid technology licensed from Toyota. I’m sure Nissan would like to get around that restriction and be able to stand on it’s own in the battle for alternative fuels dominance.

Nissan is prepping it’s EV for a 2010 launch. Itwill be an all-new vehicle, dedicated electric vehicle, not a conversion of any existing Nissan model. The Cube body is just being used for the test vehicle, similar to GM with the Cruze/Volt situatuon. The electric model will be something special that informs people of it’s uniqueness. According to Nissan “You need something that is different enough to let people know you are driving a special car.”  The model will have an 100-mile range.

I’m glad that Nissan is investing in electric technology so heavily. GM, Chrysler, Ford, Nissan, Tesla. It’s clear that with all these huge companies putting large backing behind electric technology and infrastructure, good things are happening. I wonder who will come out on top in all of this?

Thanks to AutoblogGreen for the colorful picture! I just couldn’t include one of the drab, low quality photos that Toyota had with the car’s press release. The report on Prius sales comes from Reuters via local Japanese newspaper Chunichi and Nikkei who broke the information on Prius orders.

Orders already received are over 20,000 and Toyota expects that number to increase to 40,000 before the car’s official on-sale date. Think the price cut had anything to do with that? No doubt, in my opinion the Prius is a better car at a (now) similar price. Toyota’s goal is 400,000 Priuses worldwide in 2009. To put that number and the orders received into perspective , Toyota Japan sold a total of 73,100 Priuses in 2008.

Honda has managed to sell an impressive 18,000 Insights in it’s first month on the market. That is an extremely good number, beating Honda’s expectations x 3.6. They expected to sell 5,000. Talk about beating expectations!

The price tag really has launched Honda right into volume with the Insight, and it’s broken through to the mainstream. I’ve heard people talking about it as the “people’s hybrid” and things along those lines. It remains to see if Toyota will drop the price in the United States as well. I would expect a similar drop, and a similar sales increase if they do decide to do that.

Stay tuned! This drama is just beginning.