Toyota Losing money on the Prius?

I agree. I did a decision matrix before choosing a hybrid and Prius won hands down on crash ratings, MPG, cargo space, passenger space, engine power, cost, and features. The only other choices were maybe the Insight for the high MPG but I did not want to sacrifice the cargo space and the Escape hybrid MPG was too low for my liking. The smart key option was the biggest sell for me.

Somehow I do not think they are losing money. Heck the car is selling at MSRP up to $3K over sticker price. I am sure they are also receiving government subsidies for the hybrid technology as well as money for the hybrid technology they sold to Ford and some one else.

 

I don't think they'd be extending hybrid technology into their other vehicles if they were losing money on them.

 

Re: Toyota Loosing money on the Prius?

This is what Toyota says in a FAQ about the Pius, "The Prius is profitable and Toyota is further trying to reduce costs while continuously improving the quality."

In fact in they try answer several of the other questions of that sort on this page.

 

Re: Toyota Loosing money on the Prius?

Oh, great! This debate again. :guns: :mrgreen:

This is one of those "(almost) everybody is right" kind of arguments.

If you consider only the parts and labor necessary to build a Prius, (the marginal cost of producing a car), Toyota makes a healthy profit on each one. It is, then, flatly wrong to say "Toyota loses money every time they sell a Prius".

But... If you also include the significant cost of research and development, building/updating the Prius plant, marketing, etc., then you could successfully argue that the Prius model line has not been profitable. But you'd also be conveniently overlooking some very important points, probably because you're jealous.

All that R&D money gets them more than just Prii. It gets them Highlanders and all the other hybrid cars coming down the line. A fair analysis will consider apply a portion of the R&D costs against the Prius. It will also consider the very vague notion of "branding", and the value of being among the first to market, and being an early market leader. Then there's all the licensing.

I'm confident this debate takes place inside Toyota even more than it does on PriusChat. Their bean-counters see an opportunity, and there was/is no guarantee that hybrids will work out profitably for them. But they think it will, and (probably) so do you, but no one knows for sure.

Brad

 

This rumor keeps being resurrected because Toyota at one time WAS losing money on the Prius. Toyota crossed the line into black ink on the Prius about midway through the 2003 model year. These cars have been profitable since.

Ask Karmavore has mentioned, adding to the lineup will further increase profitability as economies of scale kick in. Price per unit goes down as production goes up.

GM and other carmakers who are sitting on the riverbank, lamenting over missing this boat, try to keep this rumour alive to help them feel better about themselves.

 

I don't know about your car, but there is nothing loose about my Prius. It seems to be quite tight.

 

Re: Toyota Loosing money on the Prius?

It's spelt "LOSING"

:guns: :guns: :guns: :guns: :guns:

And if one more person starts asking about the "breaking", I think my head might explode.

 

Re: Toyota Loosing money on the Prius?

Let us not forget that the R&D is paying off in another way. The licensing agrements, Ford, Subru, Nissan etc are paying Toyota for the technology and making more hybrid components will lower cost and make the Prius more profitable.

 

The hybrid technology is a necessary part of the technology that must be developed in order to produse a viable hydrogen fuel cell car. Fuel cells do not ramp up and down quickly so a battery component is required buffer the energy requirements of stop and go driving. This is another way to justify the R&D costs of the hybrid technology.

Personally I hope we never go to a hydrogen economy but instead go straight to high density battery storage, electric vehicles. I'm really hoping that nanotechnology can make this possible in a short timeline.

 

Toyota isn't just a car company the also build forklifts and there A/C truck use a lot of the same technology as the Prius, so a lot of the RnD is spread to that division also. We in that industry have had the 48 and 80 volt DC inverted to A/C lift trucks for about 5 years now. Electric steering, most things except air conditioning. The company must have a R+D division that is huge, and no fear of spending money if it will payoff in the long run.

 

Re: Toyota Loosing money on the Prius?

Spelt is an acceptable British spelling of the word:

spell1 ( P ) Pronunciation Key (spl)
v. spelled, or spelt (splt) spell·ing, spells
v. tr.
To name or write in order the letters constituting (a word or part of a word).
To constitute the letters of (a word): These letters spell animal.
To add up to; signify: Their unwise investment could spell financial ruin.

http://dictionary.reference.com/search?q=spelt

 

Well, the English never have been good at correct English.

Wait a minute...

"Spelt" and "Whilst" are definitely part of the Queen's English. Just thank your stars (or maple leafs) that the majority of the American public hasn't lapsed into the Bush's English. Regardless of your political affiliation, you must admit that properly pronouncing nuclear (nu-CLEE-ar) isn't really that much of a challenge.

 

What do you mean? It's only off topic by one order of magnitude (Actually, now it's off by two with yours and my post )

Like many posts, it's got several orders of magnitude to go and several weeks before it comes back the the original question.....

Cheers,

 

Re: Toyota Loosing money on the Prius?

Whenever I experience that, I always make a mental note to myself to remember next year's flu shot. Or at least to not pinch my nostrils tight before trying to expel.

Seriously, just about every car or pickup or aircraft conceived will "lose" money at first. When you factor in the R&D, tooling changes, possibly a new production facility, this has to be spread out over many units.