2010 Toyota Prius
Honda's Insight isn't the threat that Toyota once thought

Toyota's third-generation Prius is a certified hit with consumers. While the Prius has been one of Toyota's more popular models in recent years, the 2010 Prius with its promise of 50 mpg has pushed sales and demand into the stratosphere.

At first, however, Toyota was a bit worried over how much damage Honda's cheaper 2010 Insight would do to the sales of its "green" poster child. The Insight has a base price of $19,800 which undercuts the Prius by a few grand. To combat the price gap, Toyota announced earlier this year that it would launch a "stripper" Prius I for just $21,000 to better compete with the pricing of Honda's Insight.

As it turns out, Toyota really had no cause for concern. The Insight hit U.S. streets and failed to generate the sales that Honda had hoped for its latest entry into the hot hybrid field. Most consumers didn't seem to care about the higher price of the Prius due to its better fuel economy (50 mpg combined vs 41 mpg combined), greater passenger/cargo space, better performance, and higher level of tech gadgetry on the options list.

So due to Honda's miss for targeting the second-generation Prius instead of the beefed up third-generation model and strong sales, Toyota has dropped plans to introduce the base Prius I for general consumers. The model will still be made available, however, for fleet customers.

In addition, Toyota is also bumping the price of the Prius II, III, and IV trim levels by $400. The new pricing will go into effect on October 18.

During the month of August, Honda was only able to sell 4,226 Insights in the U.S. However, Toyota managed to move a whopping 18,886 Prius hybrids during the same month.

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