CarSeekBlog

Toyota and Honda seem poised to go head to head in the battle for hybrid supremacy. In response to Honda’s introduction of the Insight, now on sale in the U.S. for $20,470 plus delivery, Toyota has taken the pruning shears to the price tag of its upgraded Prius in Japan to just $20,750.

The third-gen Prius, which goes on sale next month in the United States, had been expected to sell in the neighborhood of $24,000, but no one really thought Toyota would just abdicate its hybrid crown to Honda. In truth, the new Prius will offer the better economy. The Insight gets 40 mpg city / 43 highway, while the Prius pulls down 51/48. Toyota wasn’t going to let roughly $3,500 get in the way of its sales strategy and its superior technology.

But the news gets even better. Look for the current generation Prius, which will still be offered, to get a new interior and to be knocked down to about $19,130. Those babies are going to sell like hot cakes.

American carmakers are still lagging behind in the race. GM has asked for even more federal funds to develop fuel efficient variations of its much anticipated Chevrolet Volt, but the fabled all-electric with a 40-mile range won’t hit showroom floors until late in 2010. The Insight is already here and the new Prius is on its way.

And that says alot about why the American car industry is where it is today.

Filed under: GM, Toyota by Shorty