Toyota dealers in Japan received 80,000 orders for the latest version of the carmaker's Prius petrol-electric hybrid ahead of its official launch yesterday, a much higher volume than expected as the company had cut prices to fend off a challenge from its emerging green-car rival Honda.
The enthusiastic response to the third-generation Prius, which Toyota will begin selling outside Japan in a few weeks, appeared likely to propel it to the top of the domestic sales rankings - a feat achieved for the first time by a hybrid last month, when Honda's revived Insight became Japan's best-selling full-size car.
Toyota has dominated the hybrid segment since it introduced the Prius in 1997, but its engineers have called the Insight, a redesigned version of a car Honda had scrapped in 2006, its "first real competition".
Honda is offering its car for Y1.89m ($19,600) for the most basic version, the lowest price yet for a dualpowered vehicle.
Falling prices for hybrids reflect increased competition as well as higher production volumes. Toyota said it hoped to sell between 300,000 and 400,000 Priuses this year and 500,000 to 600,000 of all its hybrid models, a number that would make up close to 10 per cent of its expected sales.
Toyota and Honda are hoping the increasing popularity of green vehicles will reverse a two-decade slide in Japanese car sales, which has worsened sharply with the current global recession, pushing both carmakers into unprecedented losses in the March quarter.
Introducing the new Prius at a launch ceremony yesterday, Akio Toyoda, Toyota's incoming chief executive, said the company had set a domestic sales target of 10,000 cars a month. Actual deliveries could run at twice that rate, however, as executives said they hoped to fill the 80,000 pre-launch orders in about four months.
Toyota's sales target is double Honda's monthly goal for the Insight but roughly equal to Honda's actual sales of 10,481 Insights last month.
Toyota is offering the new Prius at a starting price of Y2.05m, more than the Insight but less than the cost of the previous Prius and about 15-20 per cent below what it had originally planned to charge. Newly introduced tax breaks and other incentives on low-emission vehicles make the effective cost for Japanese drivers several hundred thousand yen lower.
Analysts said Toyota was sacrificing already thin profit margins on the car for the sake of preserving its market share.
Toyota used the launch event to trumpet the Prius' advantages over the Insight, whose simpler powertrain - unlike the Prius, the Insight cannot run on its electric motor alone - makes it cheaper to build but less fuel efficient.
