Toyota Yaris-Based Hybrid to Take on Honda Insight

The green car race between Toyota and Honda is heating up.

Toyota Motor Corp. plans a new small hybrid car to take on the Insight, the inexpensive Honda hybrid that just reached the United States.

The small gasoline-electric car being planned will be a low-priced spinoff of the Toyota Yaris, said Akihiko Otsuka, chief engineer of the redesigned, third-generation Toyota Prius.

"We are developing a low-priced hybrid vehicle like Honda's Insight," Otsuka said. "We are going to compete by expanding our hybrid-vehicle lineup to smaller hybrids, in the class of the Vitz [sold in Japan] and Yaris." He did not say when the small hybrid would debut, but it could arrive as early as 2011, according to Japan's Nikkei business newspaper.

Toyota's plan is the clearest sign yet that it is worried about the inroads that its domestic arch rival is making into small, low-priced hybrid vehicles. The Honda Insight, which starts at around $20,000, is selling briskly in Japan and will be followed by a hybrid version of the Fit compact.

Cheaper than a Prius

By contrast, Toyota's third-generation Prius has a bigger engine and many options common to premium cars. The current, second-generation Prius, at around $22,000, already is more expensive than the Insight. The updated model is expected to be even pricier when it arrives in May in U.S. showrooms.

Otsuka said the small hybrid being developed will be cheaper than the Prius.

Toyota's hybrid strategy calls for bringing more core technologies in-house, he added. The electric motor and inverter for the Prius currently are manufactured by Toyota.

The company also is developing its own lithium ion batteries so it won't be overly reliant on its joint venture with Panasonic for power packs, Otsuka said.

The Prius uses nickel-metal hydride batteries supplied by Panasonic EV Energy Co. But future green cars are seen switching to lithium ion because they are lighter and more powerful.

Honda is teaming with Japanese battery maker GS Yuasa Corp. to develop its lithium ion power packs. The Insight uses nickel-metal hydride batteries from Sanyo.
Better aerodynamics

Otsuka said the top priority in developing the new Prius was to boost fuel efficiency, not reduce the price. Through countless overhauls, he achieved a preliminary EPA fuel economy rating to 51 mpg city/48 highway, up from 48/45 mpg for the 2009 Prius.

Foremost among the improvements is better aerodynamics. The new Prius has a drag coefficient of 0.25, the slickest in Toyota's lineup. That compares with 0.26 for the current Prius.

That difference alone delivers a 1 percent increase in overall mileage, Otsuka said.

The latest Prius also gets a 1.8-liter gasoline engine, up from the current generation's 1.5 liters, so it can get better fuel efficiency at higher speeds.

While the new Prius shares the same name as its predecessor, it has a new platform it shares with the Auris, which replaced the Toyota Corolla hatchback in Europe. The new Prius also shares more parts with the Auris than with the second-generation Prius.

"The Auris platform was designed so it could also carry a hybrid system," Otsuka said. "By making it flexible, it can accommodate future overseas production and reduce costs."