Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

"We reduced costs of hybrid systems for the current Prius by 50 percent from the first generation ... For the next-generation Prius, we will be able to cut costs by another half"

That's awesome! I drive a Corolla and as any Corolla owner will tell you, the car is VERY high quality and dependable. This is Excellent news for the future of the Prius! It means affordability, profitability (incentive for automakers to keep building hybrids), and still maintaining a high quality product that consumers love!

Batteries in N. America means jobs in N. America! (and for the raw materials suppliers as well)

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

That is interesting because a comparable equipped Prius will cost us (buyers) $2,500 more than Corolla. With Corolla starting $14-15k, will next-gen Prius start around $17-18k?

Insight II is starting to look over-priced ($18.5k), smaller, less efficient, possibly slower, and no future PHEV upgrade.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

I just realized I should subtract the $2,500 cost saving from the current gen base price.

Starting price for 09 Prius $22k - $2.5k = $19.5k. That is probably the lowest we can expect from the next gen.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

I thought I have read in the past that Toyota nets about $500 per Corolla. hmm.

Well, here is hoping that the hybrid savings are passed on to the consumer, or used to build another ten battery factories.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

Is there a Corolla equipped comparably to a Prius? The Corolla is an excellent car, with Toyota reliability. But can you get it with TC, VSC, SKS, and all the other Prius luxuries? The Corolla is (I repeat) an excellent car. But the Prius is more car. Bigger, more powerful, burns less gas, cleaner, more comfortable. So of course it costs more to build and the price tag is higher.

The fact that they're reducing the cost of components is good.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

I think there is a misunderstanding here. They do not have any intentions to pass the savings on to the consumer anytime soon because its arguable if they have ever even made a profit from Prius yet because of the R&D. He says that the profitability is getting close to what it is for a Corolla. The Corolla is a smaller margin car, but is built in high volume for lots of market share and lots of profit because they sell so many of them. One thing that really helps the Prius is that the marketing costs are so low because they don't even have to advertise them to sell them.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

it is an mix of both... they certainly aim to get good price for Prius III otherwise they would not plan to sell 500,000 of them in 2010.

Quite possibly, Prius III will have more standard equipment, bigger interior, more poweful engine, and better mpg, at around the same price as current one.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

I wouldn't be surprise if Toyota goes back to the original Classic Prius MSRP of $19,995.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

If I have to choose between a $ 20 K HSD Prius and a $ 19K IMA Insight (new 5 door) Prius here I come !

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

This is a good point. The Corolla is a very inexpensive compact that appeals to a certain segment of buyers that wants very basic transportation and absolutely no problems after the sale. A 'basic' LE 4AT Corolla with VSC and 6 airbags lists for about $18500. It's not as 'nice' as a Prius nor is it as flexible utility-wise.

However the basic Corolla Matrix is much closer to a Prius since it too is a 5 door small 4c hatchback. With VSC and the same 6 airbags it lists for about $20000. It has the same size and same utility as the Prius only it doesn't have the same fuel economy. Like its sedan sibling the Matrix is a little more 'basic' than the slightly more upscale Prius Package #2 at $24300.

But you correctly noted the Prius has almost NO marketing costs and no financial ( commercial ) incentives.

This $4300 pricing differential is what Toyota has to address. IMO the differential cannot grow beyond $4500 and hopefully will remain about $4000. It shouldn't go as low as $2000-2500 because that would take sales away from the Matrix and would be 'leaving money on the table'.

Reading Toyta's code I think what I'm hearing is that the pricing will remain at the same level as the current Gen. At that level the vehicle is expected to be solidly profitable at a rate of about 5% net after taxes; i.e. about $1000 per vehicle.

Now as to generating additional volume in order to reach 300K+ units annually that might take some 'incentivization' of the same type as the Corolla or Camry. A $500 rebate or subvented financiing?

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

Being that I considered a Matrix before getting a Prius, I thought the loaded Matrix S with automatic and top level option package was somewhat comparable to a Prius package 4.

That Matrix was in the $23k ish range, was quoted in the $21k's, so figured roughly $23k or so out the door.

These days the Prius pack 4 is about up to $29k out the door.

The legroom between back and front seats was awfully tight in the Matrix to me. I rented an 09 Matrix XRS for 3 days, got about 28 mpg.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

cycledrum,

I might be just a bit dense this morning, but I could not add trim packages to the Prius at the build-your-own part of the Toyota website. I had to choose the touring model, and there only package 2 and package 6 came up at about $25.5k and $29k respectively.

I also viewed the Matrix as my alternate choice back in 2004, and I agree that in many ways it is a better comparison car to the Prius for cost analysis than the Corolla. Yet it seems clear that the Prius cost excess over the Matrix is going to be very dependent on trim line chosen even at msrp. let alone street prices.

Re: Next-gen Prius will have a profit margin close to Corolla. Will build HV battery in North Americ

A 2008 Pckg #2 Prius lists for about $24500 vs about $20200 for a similar 2009 Matrix Base w/ VSC ( no SKS and no backup camera ).
A 2008 Pckg #4 Prius lists for about $26500 vs about $23800 for a similar 2009 Matix S with top trim options ( VSC, JBL, BT, AW, SR, but no SKS or b/u camera ).

Add $500 to the above 2008 prices for the 2009 Prius prices.