Toyota Rumored to Develop New Low-Price Hybrid to Compete with Honda Insight

With the new 2010 Honda Insight hybrid already undercutting the current generation Prius in price, it's a no-brainer that Toyota execs are starting to worry that Honda's hybrid proposal will have a serious advantage over the next-generation 2010 Prius as the latter will carry an even higher sticker. According to Japan's Nikkei Business daily, Toyota is planning to confront this problem with the introduction of a new, low-price, hybrid subcompact model that could find its way to overseas markets.

Although Toyota declined to comment on the report, Nikkei claims that the new gasoline-hybrid car will use many modified parts from the Prius with power coming from a smaller engine than the current model's 1.5-liter unit. The new model, that could hit the market as early as 2011, will reportedly cost 20 to 30 percent cheaper than the current Prius hybrid, which starts at 2.33 million yen ($23,500 with today's exchange rates).

The Honda Insight, that went on sale in Japan this February, has a starting price of just 1.89 million Yen, or with the current exchange rates, $19,200. In the U.S., the Insight will be priced from $19,800 (see details here).