Toyota Plans Yaris-Based Hybrid

The hybrid war between Toyota and Honda is heating up with Toyota Motor Corp’s plans of a new small hybrid car to take on the Insight, the inexpensive hybrid by Honda.

The announcement, first reported last month by Japanese business newspaper, Nikkei, suggests Toyota is facing fierce competition with Insight hybrid estimated cost of $20,000 when it goes on sale this month, several thousand less than Toyota’s Prius.

"We are developing a low-priced hybrid vehicle like Honda's Insight," Akihiko Otsuka, the chief engineer on the third-generation Prius, told Nikkei. "We are going to compete by expanding our hybrid-vehicle lineup to smaller hybrids, in the class of the Vitz (sold in Japan) and the Yaris."

According to Automotive News (free subscription required), the new Insight is selling well in Japan, and Honda is planning to follow-up with a gas-electric version of the Fit compact.

So, keep your eye on the horizon for a price war consumers.

More on this from Automotive News.