With sales of the 2010 Prius starting today in Japan, Toyota is reporting that it has received 80,000 pre-sale orders, double the number it had originally expected.
Toyota predicted back in April that it would receive about 40,000 pre-sale orders. But hybrids have become a hot segment in Japan, with intense competition between Toyota's Prius and the all-new 2010 Honda Insight.
Honda re-introduced the Insight this year as a 5-door hatchback with a profile and exterior styling borrowed from the 2009 Toyota Prius. Armed with a less-effective, but cheaper-to-produce hybrid system, and a much lower price than the Prius, the Insight became an instant hit in Japan. Honda's hybrid sold 10,500 units in April, more than doubling the automaker's 5000 monthly sales target.
In response, Toyota dramatically altered its pricing strategy for the 2010 Prius. While it had initially decided to price the 2010 model higher than the 2009 model because of increased content, it executed a prompt about-face at the news of the Insight's success. In Japan, Toyota willsell the 2010 Prius for about 300,000 yen (about $3100) cheaper than the 2009 model, and will continue to sell a stripped-down version of the 2009 Prius at Insight-level prices.
Honda's CEO, Takeo Fukui, took a shot at Toyota's pricing upheaval last week. "You can't just suddenly change pricing policy -- that's going to destroy the market," Fukui told Reuters last week.
"We're not paying any attention to (the Prius). They're not going to last long with that strategy," he said, and voiced his opinion that a lower-priced Prius would cannibalize sales of other Toyota cars and hurt its dealers.
The 2010 Toyota Prius is scheduled to go on sale in the U.S. within the next two weeks, with an MSRP of $21,750 including destination charges, $1000 cheaper than the 2009 model.