Akio Toyoda, the next president of Japanese auto giant Toyota Motor, appears with the third-generation Prius during a press conference in Tokyo Monday

Toyota Motor Corp. began Japan sales of a revamped Prius, the world’s bestselling hybrid, setting a sales target twice as high as Honda Motor Co.’s goal for the Insight.

The new Prius comes as Honda threatens Toyota’s grip on the hybrid market with the Insight, introduced in February and the first gasoline-electric vehicle to top Japan’s monthly auto sales excluding minicars. The rising competition may dent Toyota’s bid to boost sales of hybrids to offset plunging demand for more profitable sport-utility vehicles.

“With more and more small cars crowding the market, a price war is inevitable,” said Yuuki Sakurai, general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co., which manages the equivalent of $54 billion in assets. “Hybrids don’t make that much money and may become a niche market.”

The new Prius boasts a fuel economy of 38 kilometers per liter, according to Toyota, compared with the Insight’s 30 kilometers per liter. The carmaker already has more than 80,000 orders for the model, incoming President Akio Toyoda said at a press conference in Tokyo.

Bigger network

The Insight costs between 1.89 million yen and 2.21 million yen. Honda in April sold 10,481 Insights, more than double its monthly sales target of 5,000. Toyota’s previous Prius was priced between 2.33 million and 3.34 million yen.

Toyota fell 0.8 percent to close at 3,560 yen on the Tokyo Stock Exchange. It has risen 25 percent this year.

Globally, Toyota plans to sell between 300,000 and 400,000 units of the new Prius and between 500,000 and 600,000 units of all hybrid models in the year ending December, Toyoda said.

Following the Japan introduction, the carmaker plans to double the number of countries the Prius is sold in to about 80, mostly by extending its reach into the Middle East and Latin America, Yasue Kato, a spokeswoman, said.

Source: Bloomberg