Toyota Plans a Subcompact Hybrid

July 28, 2009

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.


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  • Charles

    Looks like my December 2008 WAG for the 2009 sales of the Insight may have been optimistic at 37796, and my Fusion/Milan WAG of 19998 may have been too low.

    I just do not see the value of the Insight. Now that Consumer Reports has panned the Insight, I do not see how it will even get what at the time was a very low WAG.

    As for more high MPG hybrids, that is great. Go Toyota and Ford. The others, it is time to get into the hybrid game.

  • brent

    The Prius is selling better than the Insight in the US because Toyota is spending more on marketing to maintain the Prius’ hybrid cache. And the Insight looks as cheap as its price.

  • Charles

    Brent, I think you are only partly right. The Prius is a better car. Better MPG both city and highway. Larger for both passengers and cargo. Much better Consumer Reports review. The Insight has a very small price advantage.

    As for Toyota spending more on marketing, I seem to see the Insight adds almost as much as the Prius. I have seen many more Insight adds when compared to the Fusion or Camry Hybrids, which are selling as well as the Insight.

  • no thanks

    Coworker has been driving his new Insight for a month and a half is averaging 48MPG. He is very happy with the Insight and thinks the reviewer are getting kickbacks from Toyota. 8-)

  • Rob8756

    I think the point is missed in the article and the commentary, a mild hybrid system such that Honda uses and GM uses in their also poor selling hybrids (Malibu, Vue, etc) are not what people want. The full hybrid system that Ford and Toyota offer is far superior. The Insight’s 13hp electric motor is simply a joke when compared to what Toyota and Ford offer.

    I think people who have hybrids enjoy being able to drive on electric power alone because it’s cool (this is my opinion as a FFH owner and frequent Prius renter). Honda simply doesn’t have the “right” technology for the US market.

    In my opinion (and only time will tell), Honda will never have a popular US hybrid until it develops a full hybrid system that offers an “EV” experience.

  • Mr.Bear

    I thought the Yaris Hybrid was announced by Toyota back in March. I’m not sure what in this story is new information. I’m only surprised there isn’t more talk of a Corolla Hybrid.

    In my opinion, the $19,800 base price has hurt the Insight. Especially when the average Prius goes for less than $3,000 more. If it had been priced at $17,500 as originally stated, the Insight would be a no-brainer for anyone looking for a compact.

  • nyc solar

    I think the real problem is that people in the US do not buy cars because they are cheap. In fact, we just cost as an excuse not to buy cars that are good for the environment. The average person who refuses to buy a hybrid because it’s too expensive will go out and buy a gas guzzling SUV for $40k or more. Americans wear cars like clothes. We buy for image and status as well as the ability to kill anything we crash into while texting on our cell phones. Styling and image sell better than performance and economic sense. This is why BMW and Mercedes’ marketshare skyrocketed since the 1980s…. They have the right image. If they sold their cars in the $20k range, no one would want them. Why is a Lamborghini cool? Because it costs $300k. It’s fast… but so are cars that are $100k. Even a $50k Lotus is fast. The cost is what makes it rare and why they are always sold out.

  • Samie

    It must have been a tough decision for Honda to either go w/ the hybrid brand name of the Insight or apply their new generation to a new or existing subcompact or mid-sized sedan model. The Insight is a interesting vehicle because it seems to be in the middle of options for consumers but in this case that’s not a good place to be in. Honda will have to revamp this model & tech in a shorter time period say 3-4 years. I suspect that the only way the Insight will be continued in the long-run is to offer a similar price & driving range/experience that rivals the Prius. Once subcompact hybrids like the Fit or Yaris come out they will squeeze out the marketing position of the Insight. That is why if Honda wants to make the Insight their flagship of hybrid technology it must be improved & will result in higher price tag.

    Can I say if this story is correct it will be great news in expanding the hybrid market beyond where it is today. I actually see sub compact hybrids being a huge hit in N. America only if they receive 50mpg+
    & have enough power/ acceleration for normal interstate driving.

    One last thought, I can understand from a car manufactures point of view that you want to develop a hybrid brand before applying tech to other fleet vehicles so that when more options come along consumers don’t abandon a Prius b/c a hybrid Yaris is cheaper & may get similar mpgs. And at first the new generation Prius was a bit of a yawner but considering the improved power it was actually a smarter decision to focus on improving hp instead of mpgs so when a hybrid Yaris comes out they don’t compete for the same type of drivers or say driving experience.

  • FamilyGuy

    Please, not smaller cars. Enough with the SUV stuff. More for the family of four, please! Some additional seating for visiting grandparents would be welcome. I live in a very developed area, I don’t need to go off roading with the SUV or haul tons of construction material. I just want to drive on the streets and haul around my family.

  • Dan Graifer

    Agreed. What we really need is a hybrid mini-van for all the soccer moms stop-and-go driving kids, pets, and groceries around suburbia. Toyota has a hybrid Previa in Japan, but wont import it into the U.S. because they don’t want to steal sales from the larger Sienna made and sold there. Ford has demonstrated with the Fusion that they can engineer a good hybrid; Maybe this is an opportunity to steal a march on Toyota, Honda, and Chrysler that have dominated the minivan market for years!

  • RKRB

    Sure, a subcompact hybrid that tops the EPA mileage charts can advertise its bragging rights, help inflate CAFE figures for the manufacturer, and have a psychological impact. Nevertheless, those extra miles per gallon have little incremental effect on cost or energy use, and the hybrid system will add substantial cost for the buyer. If a subcompact Yaris hybrid gets 55 mpg, it will save about 20 gallons per year over a Prius (which sure seems like a far more comfortable and useful car) for 12,000 miles, and it will only save about 80 gallons compared with a 40 mpg car. If we all drove 40 mpg cars or even 30 mpg cars, we would be going a long way towards energy sufficiency and a cleaner planet, and after all, that’s the goal. Even a 55 mpg car, or even an electric vehicle, will be using fuel and polluting the air!

  • Lois

    Why don’t they make a hybrid RAV4? I have a Prius, and would love a mini SUV, but want excellent gas mileage. The gas mileage for the Highlander is not that impressive.

  • DJB

    IMHO, it is unfortunate that auto manufacturers only high(er) fuel mileage vehicle offerings are more expensive hybrids, and soon coming even more expensive pure electrics, like the Nissan Leaf.

    Almost 20 years ago Suzuki realized a small, light, car could be made and sold inexpensively in the US, without needing a hybrid drivetrain, and still return fuel mileage of close to 50 mpg. Of course I’m referring to the Suzuki Swift/Geo Metro.

    Preferring to spend less on cars in the first place, as they are generally depriciating assets, I would welcome a modern version of the Swift/Metro: small, light, and affordable.

    Too bad for me that auto manufacturers have no interest in selling such cars in the USA. Prohibitions of current US government requirements not withstanding, many such “kei” cars are readily available from various manufacturers in the Asian market.

    A three-wheeled version of Asia’s kei cars, would be an easy way for manufacturers to offer these kei car variants in the US, and circumvent US government regulations, as three-wheelers are classified as motorcycles.

    Having spent the last 20+ years in the US car business, I am fully aware that there is a large untapped US market segment for small, inexpensive, fuel efficient cars. Too bad that the auto manufacturers by and large choose to disregard this segment of the buying public.

  • Geddy

    Without trying to be too harsh, Americans are the biggest hypocrites in existence.
    Ok, that does sound harsh. It’s still true.

    Having lived in Europe and the US I can safely say that they talk a big talk here but in reality they actually consume 3 or more times the natural resources of any other people group except maybe the Saudis.

    I ran a little experiment a few months ago.
    Without qualification I asked people I knew if they were ‘eco-minded’, and if they were actively living in an ‘eco-responsible’ manner. I made sure I used the lame ‘eco’ terminology because liberals love to make up meaningless words.

    So, what did I find?
    Everyone I polled said the same thing, “Oh yes, we are very concerned, blah blah, global catastrophe, blah blah, do my part, etc, etc…”
    Fine.
    Now the kicker: Every one of them drives a f***ing enormous 9mpg behemoth SUV. They’re liars and they don’t even see it. My boss thinks she needs a Cadillac Escalade to drive her kids to soccer practice. My coworker bought a 25′ long suburban for no reason whatsoever.
    They’re utterly clueless and won’t ever change unless forced to. That’s why I want fuel to go to $8 a gallon soooo badly.