Toyota Not Worried About Competition From Honda

With the new Honda Insight coming out, you might think Toyota should be worried about the competition. After all, the new Insight will cost less and yet all you have to do is look at the pictures to the right (can you tell me which is which without really looking at it?) and you can see you'll be getting a very similar car to the Prius. It's unknown what the fuel economy numbers are going to be, but I would bet they will be similar.

In which case, Toyota should be worried, right? The new Insight costs less and it's very similar to the Prius.  So, which would you choose?

But Toyota isn't worried at all.

"There's plenty of room for both of us to sell probably whatever we can produce," Jim Lentz, president of Toyota's U.S. sales unit, said in an interview in Detroit yesterday.

And he's right.

At least, for now.

There's no doubt the demand for the Prius is well over what Toyota can produce. With $4 gasoline this year, which Toyota hadn't expected, the demand for hybrids, especially the Prius has skyrocketed.  But the number of Prius produced this year will end up being very similar to what was built last year.

Lentz said there's intention to purchase over 600,000. That's well over what they can build this year or even next year. But I'm sure they plan on building more over the next few years. And if Honda can produce just as many Insights as Toyota can build Prius, the demand is about to be met, probably sooner than you might expect.

Especially if you consider all the plug-in hybrids expected in 2010.  You may expect a lot of the people looking for hybrids today are going to want plug-ins in 2010-2011.

Which means, Toyota shouldn't be worried about the Prius today or even tomorrow. But there's finally going to be some real competition and Toyota should be making plans for that now.