If the prius is profitable and are selling like mad, why is toyota obligated to come out with a new

It all depends on what their competition is going to do. In some cases (Honda), there already are competing cars out there. Granted they aren't quite as good, but they're also not so far away.

When releasing products, there are a couple of paths you can take. First to market is by far the most profitable, but also the most risky. Once someone's there, however, the risk, and the profits, drop dramatically for any competitors that come out with a similar product. Instead, competitors try to leapfrog the competition.

Toyota's continual improvement and attempts at the next gen Prius is the smartest thing it can do. If they wait, then a few years down the road GM or someone may come out with a plug in hybrid that leapfrogs the Prius, leaving Toyota in the uncomfortable position of playing catch-up. So instead, Toyota's striving to obsolete their own current technology, like most of the large, high-tech companies today.

Lets use an example here... the Apple iPod. The first Generation is, arguably, still ahead of most of the competition out there. Yet Apple didn't settle for that. now we have the recently introduce iPod Touch, which makes all former iPods look trashy. They obsoleted their own products in order to secure the "leader" role in the future. And they'll continue to do that, because first to market always brings in a lot more money than coming in second or third.

Besides, lets say Toyota releases a plug-in hybrid next year. It'll be just like the old days, with waiting lists a mile long at every dealer. Not only will they develop new customers, but old customers will upgrade, flooding the market with used Prii. 3-4 years down the road, the owners of those used Prii will decide to get a new car, and will be more likely to look at a Toyota hybrid than other brands (assuming their experience with the Prii was favorable, which you have to hope for).

 

Yes, it's important to avoid stagnation or you'll lose market advantage.

I believe that one of the reasons Toyota does so well right now is because of the Prius. Even if the Prius isn't their best selling or most profitable vehicle, it has helped Toyota's image as an environmental and technological leader, which helps them cross-sell other vehicles.

If other car companies are allowed to catch up, they may steal Toyota's thunder and reap the benefits Toyota currently enjoys. With GM threatening to produce several PHEVs in the next few years including its 40-mile-to-a-charge Volt, Toyota is at risk of other companies not only catching up, but surpassing Toyota!

Therefore, Toyota must continue to improve the Prius if they want to keep riding the wave they're on.

 

Toyota has licensed its current technology to companies like Nissan. If they want to stay on top, they have to come out with newer technology.

 

It reminds me of the VW Beetle. Back in the 1960s and 1970s, the outer appearance of the beetle really didn't change much. In fact, they had an ad that stated how proud they were that a fender from a 1962 beetle would fit on a 1968 beetle. Of course, VW made a lot of internal mechanical improvements to the car year by year. I was a VW owner for six years (my first car was a 1970 Type III VW Squareback) and so I learned all about the cars.

I like the fact that the current Prius is in it's 5th year of production. Each year Toyota has ironed out bugs and made small changes and improvements. I know our 2007 Prius has improvements over the years before it, and I am sure the new 2008 has improvements over the years before it too.

But Toyota has to press forward, the Prius has to constantly improve or it will be eclipsed by other automakers. This is precisely what happened to the VW bug. 1970 was it's biggest year sales-wise. After that, sales declined and the Japanese imports took over. By 1979 the writing was on the wall, and VW officially discontinued production (Mexico continued manufacturing the Beetle until 1997, and Brazil continued until the late 1980s).

I am looking forward to a Prius that gets 90mpg. I think it can happen too, as long as they make the Prius a plug-in hybrid with an EV switch. Then we could make short trips around town (say up to 40mph) without ever needing to turn on the ICE.

 

<div class='quotetop'>QUOTE(burritos @ Sep 19 2007, 12:52 PM) [snapback]514855[/snapback]</div>

I'd say yes, it is wise. The research they're doing now will help them along the path. Think of it like this: Lets say their end goal is a Prius that can go 100 miles EV, while still having a gas tank and engine for longer trips. They have to figure out, in that case, how to get the electric motors to operate at a higher speed (so you can drive on the highway under electric power). Thats one of the big improvements they're looking into with their upgrades (in addition to the batteries).

The actual batteries themselves are almost a side thought - there are a ton of companies working on them, and Toyota will just buy what they need when they need it. It makes sense for them to be buying the best batteries they can right now, and just keep up with what the market can provide.

In the end, it's not a question of "concentrating". There are a number of different things that need to be in place before they can reach their "end goal", and they'll roll those improvements out as they finish them.

 

The Prius is the best-selling hybrid, yes.

However, Toyota is not without competition-- Honda is also selling their Civic hybrid quite well. Honda is continually making improvements to their IMA drive (for the 2008 HCH they added complete cylinder deactivation so in some conditions it can cruise on electric power alone, and changed the A/C to electric so the ICE does not have to run when the car is idle). If Toyota rests on its laurels, Honda will rapidly gain market share.

In Japan, "business is war." And Toyota is not about to give its arch-rival Honda a much-needed break to catch up. Not especially with GM, DaimlerChrysler, and BMW about to pile on with their jointly-developed 2-mode hybrids.

Keeping up the pressure against their opponents while they have the advantage is a smart business move on Toyota's part, IMHO..

...And I can't wait to see that even-sleeker 2009 Prius (the picture in my avatar). B)

 

Sounding more and more like the all-new Prius will be out for the 2010 model year ... sounds like a little face lift for the 2009 prior to then.

 

Actually, the "pump the well till it goes dry" production approach is what GM and Ford have been doing.

 

<div class='quotetop'>QUOTE(burritos @ Sep 19 2007, 09:06 AM) [snapback]514795[/snapback]</div>

Well, from a purely business perspective, you have hit the nail on the head. It is a wast of money to come out with a product that only beats YOUR current product. It is clear that Toyota is riding the wave that they created. And you are right that they "deserve" it. But again... this is all from a purely business perspective.

Why should they do anything different? Morals. But I haven't found a major car company with any of that, so I'm not going to hold my breath. Can we as a society afford to NOT use the best, most efficient technology available? Probably not for much longer. But we don't have the choice as long as corporations are running the show - typically under the banner of "the great free market."

So yes. For Toyota to milk the most profits from the Prius, they should wait until somebody else comes along to meet or beat the Prius. Just ignore the part about what the world needs to happen.

<div class='quotetop'>QUOTE(FL_Prius_Driver @ Sep 21 2007, 01:41 PM) [snapback]515931[/snapback]</div>

Yup. Just look at the SUVs sitting on the lots and you'll see how well that's going for them, eh? That's called pumping just a bit too long!