TOKYO – Toyota rolled out the revamped Prius on Monday, and said it already had 80,000 advance orders in Japan for the remodeled hybrid amid intensifying competition with Honda's rival offering, the Insight.
The world's largest automaker said it aims to sell up to 400,000 units globally a year of the car.
"We are resting the future of cars in this model," said incoming president Akio Toyoda, the grandson of the company's founder, who drove the new model onto a stage at a packed Tokyo showroom.
Both Toyoda's presence and new Prius are symbolic of Toyota Motor Corp.'s pursuit of a turnaround from its worst annual loss since its 1937 founding.
The Prius, now in its third generation since its 1997 introduction, is the best-selling hybrid in the world, racking up a cumulative 1.256 million units sold in more than 40 nations and regions.
But now Toyota faces a challenge from Honda Motor Co., whose more cheaply priced Insight has sold briskly since it was introduced in Japan in February. In April, the Insight ranked as the top-selling vehicle in Japan — the first time a hybrid clinched that spot.
Toyota said its Japan prices for the Prius would start at 2.05 million yen, or about $21,600 at current exchange rates, less than its predecessor model.
But in an unusual move aimed at competing against the Insight, Toyota also said it will continue to sell the current Prius in Japan — and cut its price. It targets rental and corporate customers, and will sell for 1.89 million yen, the same price as the Insight.
Toyota had already given the U.S. prices for the 2010 Prius — starting at $22,000, unchanged from the base price for the 2009 model. It is also promising a more basic U.S. model as well for later this year starting at $21,000.
The Insight, which is smaller than the Prius, carries a lower manufacturer's suggested retail price of $19,800 for the base model in the U.S.
Honda has sold 19,492 Insights in Japan since it went on sale in February, and 2,665 Insight vehicles in the U.S. since March.
"We've come up with a price that we think is close to what will make people happy," Toyoda said.
Toyoda, 53, was tapped in January to take the helm at the world's biggest automaker, the first time in 14 years it has turned to the charisma of its founding roots for top leadership — mainly to bring employees and affiliates together and steer the automaker through deep troubles.
The new Prius gets a combined 50 miles per gallon, compared with 46 mpg for the 2009 model, according to Toyota.
It does even better under Japanese government testing standards, according to Toyota. Hybrids tend to offer better mileage in slow-speed and stop-and-go driving common on Japanese streets, rather than on highways — just the reverse of standard gas engine cars.
Toyota is promising 38 kilometers per liter, which converts to 90 miles per gallon, in Japan, for the latest Prius.
Although global demand for hybrid vehicles has grown in recent years, when oil prices were surging, that interest has settled somewhat as oil prices subside and a global slowdown squeezed auto sales overall.
Toyota reported a 42 percent drop in U.S. vehicle sales for April, weighed down by a 62 percent slide in Prius sales as consumers awaited the launch of the 2010 model.
Ravaged by a global slump, tight credit in the critical U.S. market and the strong yen, Toyota racked up a larger-than-expected 436.94 billion yen ($4.4 billion) loss for the fiscal year ended March 31, a dramatic reversal from the record profit of 1.72 trillion yen it earned the previous year.