Hybrid War Heats Up in Japan

Honda's new Insight went on sale in hits homeland about a week ago, and already it's under attack. Before it hit the market, there were rumors that it would be much cheaper than the Toyota Prius. Toyota, however, has other ideas. The Insight is 1.89 million yen ($18,853 USD) in Japan, which is the same price as the current Prius. Toyota then priced the coming third generation Prius at 2.05 million yen ($20,437 USD) to keep it close to the Insight. Then Toyota said it would keep the second-generation Prius on sale in Japan, and there have been rumors that Toyota is also working on a cheaper Prius costing around 30% less than the current one. That would pit three Prius models against one Insight, all similarly priced.

In response, Honda CEO Takeo Fukui said Honda will not lower the price of the Insight. Said Fukui, "I think that is something we can't do right now. We have to carefully examine the new Prius to know whether it is necessary for us to take certain measures. We have to think about the balance between cost and effectiveness." If Toyota does come out with three Japan-market Priuses, Honda will be thinking long and hard about those issues.

Unlike Toyota, though, Honda does have the CR-Z hybrid coming, which could give Honda some sporting hybrid credentials that Toyota doesn't yet have. Honda also said it is expanding its research and hybrid push into large sedans instead of counting on clean diesels for its bigger cars. Fukui feels that clean diesels are too expensive to develop be practical.

Source;
http://www.autoblog.com/2009/04/03/honda-ceo-says-insight-price-wont-be-reduced-further/

Honda: Would Mull Counter Measures Vs Cheaper Toyota Prius

SUZUKA, Japan (Dow Jones)--Honda Motor Co. (7267.TO) would have to consider counter measures if Toyota Motor Corp. (7203.TO) sets competitive prices for its Prius hybrid as recently reported, a company executive said Wednesday.

Honda launched its new Insight hybrid in February in Japan and is rolling out the model in the U.S. and other overseas countries.

The company has received orders that were more than triple the hybrid's monthly sales target a month after its Feb. 6 launch in Japan as the prices, which are lower than those of the current Prius, attracted customers looking for cheaper gas-sipping car amid the economic slump.

Yasuhiro Wada, a Honda general manager, said the company continues to receive solid orders for the Insight. As of Monday, orders for the new hybrid totaled more than 21,000 in Japan, more than four times the model's monthly sales target of 5,000.

Honda set the lower limit on Insight's prices at Y1.89 million, about 20% cheaper than the bottom price of the current Prius.

The Nikkei recently reported that Toyota will set the prices of the new Prius at Y2.05 million-Y2.50 million, lower than the current Y2.33 million-Y3.34 million and when it launches the new model it will also continue to sell the current one by lowering the bottom price to Y1.89 million to compete with the Insight.

"If they could do that, it would be a threat," Norio Ano, the head of the Insight product project, said at a press conference.

"We would have to consider something" to stay competitive, he said.
He added that Honda executives would order Ano and his team members to further cut costs if the report is true.

Toyota has said nothing has been decided on the prices of the new Prius and whether to continue to sell the current Prius.

-By Yoshio Takahashi, Dow Jones Newswires; 813-5255-2929; yoshio.takahashi@dowjones.com

Source;
http://online.wsj.com/article/BT-CO-20090325-704087.html