Hybrid Wars: Toyota Drops Price on Prius

Looks like Toyota is feeling threatened by Honda's hybrid challenger Insight and is dropping the sales price on the Japanese Prius to try to match. Looks like we've got a hybrid war on our hands!

Honda has tried to position the Insight as a low-cost alternative to the Prius (and indeed any other car) and the sensible choice in the difficult economic climate.

It looks like it's proving to be an attractive proposition for buyers as well; Honda has reported brisk sales of the Insight in March, the first month it has gone on sale in the U.S . The base price for the Insight here in the U.S clocks in at $20,470.

The rumor is Japanese pricing on the 2010 Prius will come in at 2.05 million yen ($20,750), just above the Honda Insight. Honda has obviously touched a nerve with Toyota and this is only going to make the already tough business proposition for the Prius even harder.

It's no secret the Prius hasn't been a moneymaker; most likely a loss leader, although we haven't had that confirmed or denied by the company.

At that price in Japan, the base 2010 Prius will be comparable to pricing on a mid-range Insight. In a smart move, Toyota is expected to keep selling the previous generation Prius, with a redesigned interior and new name, Prius EX. Prius EX will be sold at a bargain price of 1.89 million yen ($19,130), matching the base Insight's Japanese price. Toyota isn't messing around here, that's for sure!

Confused yet? I know it's difficult. Basically Toyota is cutting 2010 Prius pricing to be very similar to the new Insight while continuing the old model and matching the Insight.

The pricing change isn't official yet; it's a report from Japanese Toyota dealers who were briefed of the change on March 25th. We're still waiting for official MSRP numbers from the company in both Japan and the U.S.

Thanks to AutoblogGreenfor the Toyota Prius Interior picture. Toyota's press photography is horrible, while Honda's is actually quite good (there is hundreds of pictures, no joke).

I would expect U.S, European, etc pricing cuts to follow summarily. The 2010 Prius was expected to sell for $24,000 when it went on sale next month. If true, then this is indeed a huge price cut. At that price, it erodes all the advantage Honda's Insight has as well.

The Prius is definitively a more comfortable, luxurious and better designed car, not to mention it achieves much higher fuel mileage numbers. The Insight is built-to-cost and you know it. In Prius vs. Insight it would definitely be Prius for me, but I'll take the Volt over either, thank you.