2010 Honda Insight Hybrid May Miss U.S. Sales Target

Honda Motor Co (7267.T) may fall short of its U.S. sales goal for the new Insight hybrid by a third in the model's first year due to the recession and relatively cheap gasoline, Bloomberg reported, citing a top local executive.

"Given some dramatic change in things, I don't think we'll get to 90,000. At 50,000 to 60,000, we will be just fine," Bloomberg cited American Honda Motor Executive Vice President John Mendel as saying.

Japan's No.2 automaker has forecast annual worldwide sales of 200,000 units for the Insight, which went on sale first in Japan in February and in late March in the United States. Honda expects to sell half of that in North America.

A spokesman in Tokyo said there had been no change in Honda's sales forecast.

But Honda Chief Executive Takeo Fukui told Reuters last month that while response to the Insight has been good in the United States, Honda was placing priority on meeting brisk demand in the Japanese market partly due to unfavorable exchange rates.

Shares in Honda were down 1.8 percent in mixed trade for Japanese auto stocks.

Gallery: 2010 Honda Insight Hybrid

Buy 2010 Prius or 2010 Fusion Hybrid or 2009 Prius?

Question: I have three hybrid cars with commensurate pricing: the 2010 Ford Fusion Hybrid base, 2010 Toyota Prius base and a loaded 2009 Toyota Prius. The latter seems like the best deal, but now I’m reading of braking and seat problems. Any advice?

Answer:

The 2010 Prius is a significant improvement over the 2009; it benefits from increased gas mileage ratings, a higher quality interior and an MSRP that isn’t significantly higher than the 2009’s. In fact, the entry-level 2009 and 2010 Prius both start at $22,000; the pricing differences come in the higher trim levels.

The current generation Prius has had complaints about the brake-pedal feel associated with its regenerative braking, but it’s a characteristic of the car and not a problem. You’ll be able to judge if it’s a deal-breaker when you test drive one. The same goes for the seating, which Toyota has upgraded for the 2010 Prius.

The 2009 Prius might be more attractive with its current incentive of zero-percent financing for up to 60 months in your area. Between the financing offer and the arrival of the 2010 Prius, you could find a good deal on a new 2009 Prius or even a used 2009 from current owners that are looking to trade-in for the new model. Orders are already being placed for the 2010 models, so it might be a while before you can take delivery of one.

The Fusion Hybrid is a little out of place in this comparison as it starts at $27,270 and is a larger, more traditional sedan compared to the hatchback Prius. The Fusion Hybrid competes with Toyota’s 2010 Camry Hybrid.

+ 2010 Toyota Prius, Would It Be U.S. Top Model?
+ Best Selling Car May 2009 of Japan: 2010 Toyota Prius Hybrid
+ 2010 Toyota Prius Hybrid Tax Credit is Good!
+ 2010 Ford Fusion Hybrid Tax Credit Updates
+ 2010 Ford Fusion Hybrid Road Test
Gallery: 2010 Toyota Prius Hybrid

See Who Buying 2010 Prius

Just find some u.s. guys have bought the 2010 Toyota Prius:

Owner Reviews: My new 2010 Prius:
The new Priuses are in. I got one of the first three that got into this dealer (Marin Toyota). I test drove it. Tons of geek toys. The lane keep assist is a trip (uses a camera to keep you in the lane and wakes you up with an alarm if you go out of bounds).

2010 Toyota Prius, Would It Be U.S. Top Model?

Memo to the beleaguered U.S. car industry: As the recession eases, torment from Toyota may increase.

Designers of the Prius, the curiously shaped hybrid that since 1997 has allowed up-to-the-minute Americans to advertise their eco-correctness, are going after the Average Joe.

The third-generation Prius is not just for "some special people," said Wahei Hirai, Toyota's managing officer for design. "This is a mainstream car."

The new model is more powerful than its predecessors, with more headroom, a bigger trunk, better gas mileage and a lower price. It is only now being rolled out in the United States, but judging from exceptionally brisk Japanese sales and effusive early reviews, the car looks like a hit. In May, the Prius was Japan's best-selling car.

To keep up with surging domestic demand, overtime has been brought back at the two plants that assemble the car. Workers have been transferred in from factories around the country. Production has grown to 50,000 cars a month, but customers in Japan must wait three to four months to drive home a new Prius.

The car's sudden popularity comes in a country where the recession has been roughly twice as severe as in the United States and where car sales have been slumping for years. Sales here have been helped by new tax incentives.

Yet, the real test for the new Prius is the United States, where sales of earlier models have historically dwarfed sales in Japan or Europe. As Toyota executives, engineers and designers explained to reporters during a two-day tour here, the world's largest car company has spent 4 1/2 years tweaking the Prius so it can become much more than merely an "eco-icon."

"We are not forsaking the people who want to make an environmental statement," said Paul Nolasco, a Toyota spokesman who helped lead the tour in and around Toyota City. "But the objective of the Prius is to get the family to the mall, not to see how far you can go on so many drops of gas."

The car is hardly a gas hog. It is rated at 50 miles a gallon, 10 miles better than its principal hybrid competition, the Honda Insight. The Insight was the best-selling car in Japan in April, costs less than the Prius and also seems likely to bedevil Detroit's comeback hopes.

A legion of Toyota brass explained during hours of PowerPoint presentations that the new Prius has been designed to elbow its way into the upper ranks of the U.S. passenger car market, where the No. 1 and No. 2 bestselling cars last year were the Toyota Camry and Honda Accord.

Toyota sold about 437,000 Camrys last year, while sales of the second-generation Prius lagged well behind, at about 159,000. Its buyers were mostly Americans in their 50s and 60s.

But even the new larger Prius faces tough challenges in the United States this year. Gasoline prices are running about $1.50 a gallon lower than last year, making hard-pressed consumers less likely to pay extra for a hybrid. And sales across the industry have been plunging. Prius sales in the United States fell to 10,091 in May, down 30.1 percent from May 2008. For the year to date, sales of the Prius in the United States have skidded to 42,753, down more than 45 percent from the first five months of 2008.

Moreover, Honda has crafted an ad campaign designed to appeal to younger car buyers, an audience Prius has had trouble reaching. The campaign -- whose slogan is "The hybrid for everyone is here" -- features popular music and images young people driving to an outdoor music concert or to the beach.

Prius engineers and designers said that cracking open the family-sedan market in these environmentally stressful times is not yet a job that an all-electric car can handle.

Battery technology has not developed to the point where it can provide most commuters with the range, acceleration and comfort they demand, said Masatami Takimoto, an executive vice president in research and development.

"Fundamental issues are unsolved," he said, noting that Toyoto sees gasoline-electric hybrids like the Prius -- not all-electric, plug-in cars -- as the "core" of its future, at least until there are significant breakthroughs in battery development.

The company, though, is hedging its bet by investing heavily in a joint battery project with Panasonic, and it plans to sell a small all-electric car by 2012.

While Toyota sees the hybrid as its main meal ticket for the medium-term, General Motors is hoping to move beyond hybrid technology with the Volt, which it calls an "extended-range electric vehicle."

Its batteries can take the car 40 miles between charges and a small back-up gasoline engine can take it more than 300 miles. But the estimated cost of the Volt, which GM expects to bring to the market late next year, is about $40,000. The third-generation Prius is selling for between $22,000 and $28,000, depending on options.

In its all-electric mode, the Prius can go 1.2 miles.

Toyoto, in effect, says so what?

Its designers say they have made a gas-sipping, low-emission car that's fun to drive, accommodates large people in the back seat and has room in the trunk for three golf bags.

If the Prius proves as popular in the United States as it seems to be in Japan, Toyota does have a problem, company officials acknowledged. Collapsing U.S. car sales in the past year forced Toyota to put off plans to open a factory in Mississippi that could assemble the Prius.

"Yeah, supply is going to be an issue," said Nolasco, the company spokesman.

Best Selling Car May 2009 of Japan: 2010 Toyota Prius Hybrid

Toyota Motor Corp's Prius hybrid was Japan's best-selling car in May, a dealers' group said on Thursday, attesting to robust demand for low-emission cars helped by government incentives amid flagging auto sales.

Competition is also heating up between automakers as the Prius, of which a new model hit the market last month, grabbed the top slot for the first time after Honda Motor Co's new Insight became the first hybrid to head the best-seller list in Japan in April.

"I think a green car tax break and other incentives helped the sales performance (of the Prius) quite a bit," Akihiko Otsuka, chief engineer for the new Prius, told reporters in Toyota City, home to the automaker.

The third-generation model Prius, which went on sale on May 18, was priced about $3,000 less than the previous version and there were more than 80,000 advance orders for it.

Toyota said on its web site that factory shipment would be mid-November or later for orders made after May 31.

"The Popularity of hybrid cars will undoubtedly continue as their prices have come down to affordable levels and will be more so in coming models," said Kazutaka Oshima, CEO of Rakuten Investment Management. "In addition, oil prices have been rising again lately," he said.

A ranking of Japan's top 30 excluding 660cc minivehicles by the Japan Automobile Dealers Association showed the Prius selling 10,915 cars in May, followed by Honda's Fit compact with sales of 8,859 cars. The Insight was in third place with 8,183 cars.

Gas-sipping hybrid cars have become a rare bright spot in an industry hit hard by recession, and Toyota and Honda are locked in a fierce battle in the category.

But some analysts have pointed to a growing challenge for Toyota to strike a balance with sales of gasoline cars, which have higher profit margins.

+ 2010 Toyota Prius Hybrid Tax Credit is Good!
+ 2010 Prius Hybrid Sales is a Bright Spot in Gloomy Market
+ Prius vs. Insight: Better and Wores

The 2010 Hybrid line-up has a great outlook and some meaningful gas savings for consumers.

Gallery: 2010 Toyota Prius Hybrid

Japan's May Incentives Boost Hybrid Vehicles Sales

Japanese incentives for ecological gadgets are helping lift electronics sales, according to ministry and industry data, in what may be an early sign of some recovery in a recession-battered economy.

Under a government stimulus package, that kicked in May 15, people who buy energy-efficient flat-panel TVs, refrigerators and air conditioners accumulate "eco-points," which the government promises will convert to discounts or trade-ins for products that have yet to be announced.

Despite the mystery of what the perks may be, the Ministry of Economy, Trade and Industry said electronics sales were up 50 percent during the week after the "eco-point" system started, compared to the same period last year.

Last week they were up 30 percent from a year earlier, the ministry said.

Gfk Marketing Services Japan, a private sector researcher that monitors sales data at about 4,500 electronics stores nationwide, found sales of flat-panel TVs were up 60 percent in the May 18-24 week from a year earlier.

Sales of refrigerators were up 9 percent for that week, Gfk said Monday.

Green gadget incentives are part of a larger government package meant to wrest the world's second largest economy from its worst recession in postwar history.

Japan has also made gas-electric hybrid vehicles tax-free and reduced taxes on other ecological vehicles.

Sales of both the Prius hybrid from Toyota Motor Corp. and the Insight hybrid from Honda Motor Co. are booming in Japan.

Orders for the Prius nationwide have topped 110,000, although Toyota had targeted selling just 10,000 Prius cars a month. Honda's Insight was Japan's top-selling car in April, the first time a hybrid clinched that spot.

A separate cash-for-clunkers incentive of up to 250,000 yen ($2,500) for trading in a vehicle 13 years or older won legislative approval Friday, and will take effect in coming weeks.