Eideard

Everyone in business knows that selling on price is a downward slope to non-profitability, but with profit out of reach for many automakers these days, ignoring price-oriented marketing is pure folly.

In this respect, Toyota appears to be in a conundrum. Its Prius, the darling of eco-minded consumers everywhere and by far the best selling hybrid electric vehicle (HEV) anywhere in the world, finds itself a bit overpriced now that Honda has shown up with its similarly styled and configured, albeit smaller sized Insight. Starting price for the Insight, when it goes on sale globally on April 22, Earth Day not coincidentally, will be a mere $19,800 in the US. That’s $2,200, or about 10-percent less, than the US-market Prius.

Rather than reduce the price of its already value-packed Prius, Toyota may have another solution, or so says industry insider Automotive News. The Detroit-based news service is reporting that Toyota is planning a Yaris hybrid to undercut Honda’s newest HEV, information garnered from Toyota’s chief engineer Akihiko Otsuka.

See a pattern here? Obviously prices won’t drop by 10-percent with every new model, as has been the case since the hybrid’s inception, but like electronics technology, hybrid technology is maturing, build processes are becoming more streamlined and sales numbers are increasing, allowing for better value to the consumer and more profit to the manufacturer, theoretically, at least…

The question that remains isn’t whether or not the Yaris hybrid will do battle against the upcoming Insight, as they’re two HEVs targeting very different market segments, but rather at what price point the new Yaris HEV will go out the door for when it takes on Honda’s upcoming Fit hybrid, a model that Honda CEO Takeo Fukui announced during his mid-year address in Tokyo, May of last year, when also announcing the upcoming CR-Z sports coupe and a small hatchback HEV we now know of as the Insight.

I like it, I like it. Competition producing better product, more affordable vehicles for consumers. Too bad there isn’t much evidence for American auto manufacturers getting into the scrap – at a competitive level.