Toyota Gets Aggressive with Prius Sales

In the first half of 2008, the Toyota Prius was selling like hotcakes. But sales considerably cooled off as gas prices dropped in the last months of the year. As a result, Toyota is now offering tried-and-true dealer incentives, and customer perks, to stimulate sales.

According to Automotive News, a trade publication, dealers will get a $750 “spiff” for every 2009 Prius they can sell. But that’s not all. The company announced a newly established certified used Prius program, adding more buyer protection for those who might be hesitant about picking up a used hybrid. The program extends warranties, and reduces financing, for 2002-2006 Priuses that go through the inspection program. All of the components will be covered by Toyota under a three-month/3,000-mile comprehensive warranty, seven-year/100,000-mile limited powertrain warranty and the same seven-year, 100,000-mile 24-hour roadside assistance plan that comes with all other certified Toyotas.

Great Time to Buy

Dealer discounts, extended warranties and reduced financing make it a great time to buy a new or used Prius. “It’s no longer a seller’s market,” said Earl Steward, a Toyota dealer in North Palm Beach, Fla. But will the perks be enough for Toyota to bring back Prius magic? A number of key factors will make it tough:

  • Toyota just unveiled the third-generation Prius at the Detroit Auto Show. The new model is faster, slightly bigger, and more fuel-efficient. Car shoppers may wait for the new and improved version, leaving the existing model on dealership lots.
  • The 2010 Prius will face serious competition from Honda in the form of the slightly smaller but less expensive 2010 Honda Insight. If the economy stays in the doldrums, the more attractive price on Honda’s dedicated hybrid, also a sloped-roof hybrid hatchback with great fuel economy, might win customers over from Toyota.

Toyota may be taking heed of Honda’s low-cost approach to gas-electric vehicles. According to Japan’s Nikkei newspaper, Toyota plans to extend the life of the older Prius model by selling a discounted stripped-down version, even after the new Prius goes on sale this spring. Toyota declined to comment on the story.


  • Eddie

    Sorry, your facts are wrong about sales in the 2nd half of 2008 tanking due to gas prices. I spoke with the Toyota executive at HybridFest and he stated they had SHORTAGES of MULTIPLE components that were limiting production.

  • Samie

    Stripped down model of the Prius? Would it be a Prius or a new model name sounds like Honda is a serous threat to Toyota’s control over the hybrid market. Maybe a Yaris Hybrid?? but to develop a new model takes time and marketing so how could Toyota adjust quickly to produce a stripped down model….

    Not sure I get the comment from Eddie above, spin I’m sure but there is a delay in production time and the time it takes to get a Prius on the lot so I guess the statement could have some truths if accounting for delay in production but actual numbers show a decline in sales per vehicle.

  • KMCoates

    The “components shortage” sounds good until you see the number of unsold Prius on the lots. One Norcal dealer alone said it had 60 new Prius for sale today and I’ve been seeing consistent numbers for the past couple months (of vehicles for sale).

  • Need2Change

    In this time of $6-$10K discounts, $750 dealer incentive does not appear to be aggressive to me.

    And also doesn’t the Prius already have a 100,000 miles drivetrain warrenty?

  • AugustEver

    I’m holding out for an electric car or a plug-in hybrid. In the meantime I’m driving a Smart car that I only paid 13.5K for including A/C. Do I laugh when I hear GM will ask 40K for the Chevy Volt? Yes, I do. The right technology…wrong price. But that’s another story for another day. As for Prius, Toyota will have a lot more competitors than Honda nipping at their heels soon. That’s a good thing because competition often generates the best product for the best price to the consumer.

    I drive a diesel on long trips (100 miles or more) but my Smartie is my everyday car and I drive the hell out of it.

  • Bryce

    They had supply shortages in the middle of the year, but once demand tanked, supply of components were no longer a problem….in fact….they really had too much of everything. It sucks for Toyota that their car that already has little to no profit margins isn’t fairing better in the Carpocalypse. owel…..Go Insight….Go Volt!

  • Baltimore Prius Owner

    Did someone say “Go Volt”? Are they selling Volts yet? I thought that maybe I missed something. I guess the better question should read, “Will they sell Volts?”

    Me: 2005 Prius, averaging 50.2 mpg (mostly all highway)
    Wife: 2008 Prius, averaging 47.6 mpg (she’s got a heavier foot on acceleration)

    Loving every mile!

  • Bryce

    Sorry, I guess I should take back saying Go Insight then…..and stop hoping for the Fusion hybrid…..Fisker will never sell anything…..and Toyota will never introduce that Lexus hybrid…..

    Have a little faith man. Just because car is coming out a year or two from now, doesn’t mean that it will never exist.

  • perfectapproach

    @ Bryce: I second that. GM has made it pretty clear that the Volt is on their short list of top priorities. As well it should be.

    I was extremely disappointed a few years ago when the 2nd-gen Prius was new, Honda was still selling the original Insight, and GM had nothing on the table except the (sort of) hybrid Silverado.

    Since then, GM has poked it’s head in and out of hybrid technology, and the attention they’ve drawn to themselves for the Volt is really encouraging. Not only because it’s will be their first real answer to the Prius and the new Insight (as opposed to the El-Fake-O hybrid system they developed for the Silverado and the Vue Greenline), but also because it’s will be the first production SERIES hybrid system in any car.

    The amount of good press they’ve been earning, I believe, should give them the momentum to see this Volt thing through. If they don’t see it through, after all the smooth-talking and all the bailout money they’re getting, they can burn in hell. Until then, I give them 10 cool points.

  • Zero X Owner

    I bought my Prius in Q4 2008, after gas prices had already fallen more than 50%. I had only a three month wait. Get your facts straight. Prius sales were essentially flat from 07 total year to 08 total year, on supply constraints, while full size SUV sales dropped over 25% for the same period, even with cheap gas (1959 gas, inflation corrected, would cost 1.83 in 2008) in the last half of 08. The end game is electric drive and the end is here. Now.

  • Zero X Owner

    Not to quibble, but the Chevy Volt would actually leapfrog the Prius, as it is 100% electric drive, with a range extender for the thumb suckers. But GM HAS to put them sold, in retail consumers’ hands, on the road for any street credibility whatsoever. So far GM = 0% credibility on primary electric drive for SALE follow through and delivery… still waiting for that percentage meter to start climbing after 13 years. Yes, the batteries are ready. NOW. So says my personal experience using an all electric drive lithium power pack vehicle (my Zero X) as my daily driver and commuter/errand vehicle since last year. My Prius is my long distance, secondary paved countryside state and county roads touring vehicle – it excels at that.

  • hamilton

    Looking beyond Prius raw numbers (down), hybrid sales as a percentage of the total US market pretty well held market share in 2008. The $750 incentive is a tactic to keep 2nd gen sales going while that increasingly rare species – the new car buyer – decides whether now is really such a good time to buy – or whether it’s more sensible to wait for the 3rd gen Prius (and hopefully more economic security).

    PerfectApproach – one (of several) reasons that GM missed the first AND second gen hybrid wave, was a mgmt mindset focused on scaling the GM-Allison hybrid transmission (installed in 1000+ city buses that have been running from Seattle to DC, Philly to Ann Arbor, since 2000; Google: “technical Report NREL/TP-540-40585″ for details), into “dual-mode” hybrid trucks (Chevy Tahoe, GMC Sierra, Saturn Vue).

    If you kind of squint sideways and think about the problems of carbon emissions and fuel security from an engineering or actuarial point of view, this approach makes sense. From a marketing point of view, it’s all wrong – missed the opportunity to win hearts + minds (and sales).

    Likewise, “mild” hybrids like the Silverado or Malibu look compelling to an accountant (quick return on investment for the owner), but again fail to capture hearts and minds. Ditto for the 2+ million E85-capable GM vehicles on the road (like an investor holding stock options or Gibson in “Mad Max”, the notion is that a flex fuel system gives you options if gas supply dries up).

    So GM’s latest big bet is the Chevy Volt. As a GM employee, I’m with you in wanting GM to succeed – but as a human being I’m very, very happy that more and more hybrid variants are springing up quickly, giving us choices and sparking competition.

    Let’s hope the incoming US administration moves quickly with a coherent mix of FEDERAL carrots and sticks to drive adoption!

  • Need2Change

    I’ve seen some loaded (package 6) Prius’ selling for $4K off list, and one year old loaded Prius’ with asking prices below $20K.

    It does look ike Toyota is getting aggressive with Prius prices.

  • Harry Olfart

    High fuel prices or not, I plan on buying a Prius sometime this year. Problem is, I don’t know if I should buy an ’09 or wait for the gen-3. Maybe I’ll see what the new administration does on a hybrid incentive package. I figure I’m about due for a bailout.

  • cindy

    Prius is eugly

    Prius is unsafe

    Prius puts americans out of work.

    Why buy one.

    Now that gas is lower than 2 bucks another reason not to get one.

    People are tired of the prius because it does more harm than good.

    To produce this car it takes so much oil /…

  • Shines

    Prius is beautiful

    Prius is safe

    Prius gives Americans what they want

    Go buy one.

    Now that gas prices are starting back up is a good time to get one.

    People are excited about the Prius – it has the highest owner satisfaction of any vehicle and is better for the enviromnment.

    To use this car uses so much less oil…

  • john smith

    thats great if youre a 16 year old girl listening to brittany.

  • Ron Brown

    I love my prius. I was considering a 2009 but with only 83000 miles on my 05, I think I will wait until 2010. I hope they have developed a plug in system by then. I will pay extra for that even if it doesn’t pencil out for money saved over a regular model. The environment is worth added expense.

  • Bryce

    You should probably hold on to your vehicle for a few more years, maybe until 2012, which is when the plug-in prius should be available to the public.

  • Andy

    Tarbox Toyota in North Kingstown RI has at least ten on the lot, so I don’t think it’s a part supply problem. Americans like bigger cars the number one selling vehicle in the US is the Ford F-150.

  • Jim of Nor Cal

    A long as we are sticking it to OPEC, I could care less about my carbon footprint. It was for National Security that I bought one, and I smile every time I pass the gas station. AND… I think all the people at the Toyota dealership were Americans or at least paying American taxes, dealership ownered by an American, cars serviced by Americans, and also selling some American built Toyota’s (Camry/Corolla etc) would disagree that buying a Prius is a US job killer. The UAW is the job killer. Ask GM why their average salery is $65K for assembly? Good dough for turning screws. Also great money outside of California, NY, and MASS. And this is just the average. The Union is killing themselves and our Auto industry and they best wise up. Not to mention Ford and GM need to design what Americans want. Something they have had trouble doing since the 60′s. Vega, Mustang II, Omni, Lebaron, etc. I could go on and on…