Although the two vehicles are both hybrids, the Prius is a midsize car while the Honda is a compact vehicle. But in this penny pinching market, price may become a greater consideration than size, gas mileage or amenities when purchasing a hybrid.
The Prius currently retails from $22,000 to $24,270. The Insight comes in with a base of less than $20,000. While in the past, the market would have certainly had room for two marquee hybrids, 2010 realities may have Toyota a little worried. Add to that aggravation the fact that the Insight will beat the 2010 Prius to market by a few months exacerbates the concern.
Although Toyota says the new Prius will have increased gas mileage, the fact is that gasoline is about half as expensive as it was during its heyday about a year ago. The 2010 Prius will average at right around 50 miles per gallon. That's about a 4 miles per gallon improvement over the current model. The Insight is to be rated a 41 miles per gallon.
Even though the Prius is boasting better gas mileage, more creature comforts, larger size and a tradition of reliability, the tough point that faces Toyota is this - the Honda Insight can do 90 percent of what the Prius can do for about 90 percent of the cost. That 10% gap in savings may have an impact on a consumer who is sitting on the fence.
If you don't think Toyota is concerned about the Insight, take a look at what's currently happening in Japan. Toyota appears ready to announce that it may lower the price of the gas-electric Japanese version of the Prius to match Honda's MSRP of the Insight.
While the Insight will probably not be as popular in sales in the U.S. as the Prius, Toyota is obviously concerned about hybrid market erosion.