Toyota Plans a Subcompact Hybrid
Toyota plans to launch a new $16,000 subcompact hybrid, according to a report in Japan’s Asahi newspaper. The car, expected in late 2011, will use the platform and engine of the Yaris subcompact—but will feature a unique name, design, and a hybrid system that is more cost-competitive than the company’s other hybrid models. The Toyota subcompact hybrid will be produced in Japan, and in France for the European market, according to Asahi. Toyota did not comment on the story.
The focus on a smaller size and lower cost is an apparent attempt to compete against Honda’s upcoming small hybrids, the Honda Fit Hybrid and Honda CR-Z Hybrid, due out in 2010 and 2011 respectively. However, the 2010 Honda Insight—the smallest and least expensive hybrid currently available in the US market—has not sold well. Honda was targeting 100,000 Insight sales in the US in the first 12 months, but based on average monthly sales of 2,000 to 2,500 units, will miss the mark by a wide margin. However, the Honda Insight has been a hit in Japan—thanks to government incentives and gas prices of about $4.50 a gallon.
Meanwhile, the larger and more expensive Toyota Prius continues to sell well in both Japanese and US markets. The 2010 Prius has been the number one selling car in Japan for the past two months, and sold nearly 13,000 units in the US in June. Toyota plans to raise hybrid production targets in September and October to nearly double the levels in February – April, according to Reuters.
The Honda Insight has better fuel economy and a lower price tag—about $5,000 less—than larger competing hybrids: the Toyota Camry Hybrid and Ford Fusion Hybrid. But recent sales of all three vehicles have been nearly identical—suggesting that US consumers prefer the space provided by the larger sedans (especially when gas is cheap and tax incentives are not available).
Hyundai had plans to release a hybrid version of its subcompact Accent, but instead will introduce the Hyundai Sonata Hybrid, a mid-size car, in 2011.
New all-electric cars from Nissan, Ford, and Mitsubishi will be compacts or smaller.
The introduction of subcompact hybrid models from Toyota and Honda will represent a change of direction from the past few years, when most new hybrids offerings have been SUVs. Hybrid SUVs can be 15 to 20 percent more fuel-efficient than their conventional counterparts, but mpg for those models has remained in the high teens or low 20s.
New subcompact hybrids could immediately rise to the top of fuel economy rankings—50 mpg or higher—while maintaining a price lower than any other current hybrid. Those small hybrids will also help carmakers meet new stricter fuel economy and carbon emission standards.