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Prius v Insight fight heats up

Electrical sparks: Honda's production Insight won't arrive to do battle with the Toyota Prius until next year.

Honda delays Insight hybrid as Toyota foreshadows lower prices for its new Prius

2 Mar 2009

THE much-anticipated Australian marketplace battle between the world’s only two dedicated mainstream hybrid vehicles will be even more closely contested than previously expected – but it won’t take place until 2010.

Honda has revealed that its new-generation Insight hybrid, which had been due on sale here in the final quarter of 2009, will not arrive in Australia for “at least 12 months” because of higher than expected initial demand in Japan, delaying the inevitable greenie grudge match between Toyota’s new Prius and Honda’s new Insight.

Meantime, Toyota has provided the strongest indication yet that its third-generation Prius is likely to be cheaper than the current model when it goes on sale here in the third quarter of this year, making it even more price-competitive with next year’s MkII Insight.

Due to currency fluctuations, Honda is no longer stating its new Insight will be priced under $30,000, but it remains committed to positioning its bespoke hybrid model below the Civic Hybrid sedan, which at $35,990 is currently Australia’s least expensive petrol-electric model.

15 center imageLeft: Toyota Prius.

That means the Insight could be priced as high as $35,000, putting it in the same ballpark Toyota is likely to target for its redesigned Prius.

Toyota Australia’s senior executive director of sales and marketing David Buttner told GoAuto at the Melbourne International Motor Show last week that he was aware Honda intended to undercut the Civic Hybrid with its new Insight, but suggested the new Prius would carry a lower starting price than currently ($37,400) and vowed Toyota would never allow the Prius to become uncompetitive in the marketplace.

While he would not be drawn on naming a specific price for the MkIII Prius, Mr Buttner insisted that price reduction advantages could be realised through manufacturing economies of scale.

“We look at every product that comes to the market to make sure we’re competitive with our technology on an equivalent type of vehicle,” Mr Buttner said.

“Pricing is always dependent upon your production volumes and … being able to read the economies of scale in what you do. So now, globally, there’s been over 1.2 million Priuses sold, 12,000 here in Australia. And it’s now a mainstream production vehicle in the plant, rather than a vehicle that comes off-line and gets put together on the side of the line.

“So as we progress down the track, I would expect that the price of that technology will reduce. The timeframe, I’m not too sure, but we will always make sure we are competitive in the marketplace with the product we have.

“They (Honda) are talking a sub-$30,000 vehicle – and we welcome all the competition we get in the marketplace.” Mr Buttner said the Prius would continue to have a price premium over an equivalent-sized conventional vehicle, but indicated that the gap might not be as wide with the Prius III.

The current Prius ranges from $37,400 to $46,900 for the i-Tech variant. The Corolla starts from $21,490 for the base Ascent hatch and rises to $31,990 for the Ultima sedan.

“There will still be a premium, naturally, with that sort of technology. But we’re trying minimise the premium,” Mr Buttner said.

Toyota has another model to take into combat against the Insight II – the Australian-built Camry Hybrid, production of which commences in December.

Mr Buttner told GoAuto last week that Toyota was aiming to introduce the petrol-electric Camry below the new Prius, which could see it start from around $32,000.

Honda would not be drawn on how many petrol-electric vehicle sales it intends to conquest from its better established hybrid car-making rival in Australia, but confirmed the Insight would be its volume-selling hybrid here.

“Insight will be the volume-seller for sure,” said Honda Australia’s public relations manager Mark Higgins. “We have worked out the volume targets yet, but it will be a good percentage increase on our current (Civic) hybrid sales, which average out to about 80 to 90 per month.

“Yes, we might take some Prius sales and they might take some Insight sales, but what we’re trying to do is get new people into it. We’re trying to get new buyers into Insight and grow the market for affordable hybrid cars. That’s the aim, more so than taking sales off Toyota.

“Toyota do a very good job with Prius and we’re very proud of our hybrid sales. (But) they’re slightly more geared towards government and business sales – we’re more (successful with) private buyers, but we just want to grow that green market,” he said.

Mr Higgins said Honda sold more than 10,000 examples of the Insight in its first month on sale in Japan in January – more than double the company’s target of 5000.

“So if it has the same effect in the US and Europe as it had in Japan, then the production schedule is going to push out a little bit. Insight is at least 12 months away now,” he said, adding that pricing remained a moving target.

“As far as pricing is concerned, due to the volatility of world currencies at the moment, that will be decided a lot closer to launch.

“It wouldn’t even be worth speculating right now. At the moment we’re targeting it below the Civic Hybrid sedan. The whole idea is to position Insight below Civic Hybrid.

“If you look at the Civic Hybrids sold around the world and where we hope to position the Insight relative to the Civic Hybrid – bearing in mind that’s the world’s most affordable hybrid as we stand here now – we’re confident it (Insight) will be the world’s most affordable hybrid. But who knows where Toyota will price their new Prius,” said Mr Higgins.

Honda Australia CEO and managing director Yasuhide Mizuno said similar price pressures would make the five-door Civic, which was revealed at Melbourne alongside the all-new Odyssey and the Insight concept, more expensive than originally planned.

Asked how much more expensive it will be than the Civic sedan, he said: “That’s a good question. I’m going to church every Sunday … “Of course, when we planned to introduce Civic hatch the Aussie dollar was stable, so the price might be a little bit higher than we expected. There is still a couple of months to go, but it will be very tough for us.

“(The Civic hatch) will be at a premium, Volkswagen-type level because we can’t do it as an entry-level car, but the detail is yet to be decided.” Mr Mizuno confirmed Honda Australia would launch a facelifted version of its CR-V compact SUV later this year. Before then, however, the Civic hatch and new Odyssey people-mover will go on sale in April, while Honda’s updated 2009 Civic Type R hatch hits dealerships this week.

Read more:

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First look: An Insight into production

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