Honda: Would Mull Counter Measures Vs Cheaper Toyota Prius

SUZUKA, Japan (Dow Jones)--Honda Motor Co. (7267.TO) would have to consider counter measures if Toyota Motor Corp. (7203.TO) sets competitive prices for its Prius hybrid as recently reported, a company executive said Wednesday.

Honda launched its new Insight hybrid in February in Japan and is rolling out the model in the U.S. and other overseas countries.

The company has received orders that were more than triple the hybrid's monthly sales target a month after its Feb. 6 launch in Japan as the prices, which are lower than those of the current Prius, attracted customers looking for cheaper gas-sipping car amid the economic slump.

Yasuhiro Wada, a Honda general manager, said the company continues to receive solid orders for the Insight. As of Monday, orders for the new hybrid totaled more than 21,000 in Japan, more than four times the model's monthly sales target of 5,000.

Honda set the lower limit on Insight's prices at Y1.89 million, about 20% cheaper than the bottom price of the current Prius.

The Nikkei recently reported that Toyota will set the prices of the new Prius at Y2.05 million-Y2.50 million, lower than the current Y2.33 million-Y3.34 million and when it launches the new model it will also continue to sell the current one by lowering the bottom price to Y1.89 million to compete with the Insight.

"If they could do that, it would be a threat," Norio Ano, the head of the Insight product project, said at a press conference.

"We would have to consider something" to stay competitive, he said.
He added that Honda executives would order Ano and his team members to further cut costs if the report is true.

Toyota has said nothing has been decided on the prices of the new Prius and whether to continue to sell the current Prius.

-By Yoshio Takahashi, Dow Jones Newswires; 813-5255-2929; yoshio.takahashi@dowjones.com

Source;
http://online.wsj.com/article/BT-CO-20090325-704087.html