Spinning Off a Prius Brand

As new hybrids from Honda and General Motors vie for a future piece of the growing green car market, a long-standing rumor that Toyota may launch a family of Prius-branded automobiles has resurfaced. At a time when Toyota is getting beat in the publicity game by Honda and GM, questions are raised about the hybrid juggernaut’s plan to deal with the upcoming competition. An exclusive Prius brand could be the strategic response.

As a brand, Prius would become its own entity with its own dealer network—or at least its own dealer showroom—much like the Scion brand. Cars would be positioned at various price points. "You could have a series of derivatives under the Prius brand name that would allow you to market product at a much lower cost," Jim Lentz, Toyota’s North American Sales Director, told Reuters. “To do that effectively, I think we need dedicated hybrids and I would prefer them under the Prius name."

The return of the Prius branding idea comes soon after Honda released official photos of the company's "Prius-fighter," the Honda Insight—a hybrid-only model that will sell for several thousand dollars less than the Prius. GM continues to intensify its marketing efforts for the Chevrolet Volt plug-in hybrid, scheduled for introduction in late 2010. The hybrid car market could no longer be the one-horse race that it has been for the past decade.

As Hybridcars.com reported earlier this year, the Prius brand name could feature a three car lineup of vehicles. In this scenario, Prius A would be launched in 2009—coinciding with the estimated launch date of the new Prius; Prius B in 2010, and finally Prius C in 2011. Once the launch of the Prius brand occurs, Toyota would stop selling hybrid vehicles under its own product name.

The new line-up would consist of three very distinct hybrid vehicles: a compact offering that’s smaller than the current Prius; a mid-size model that would basically be something that falls between the current Prius and the Camry; and a utility comparable in size to the Highlander. The strategy will be to cover the widest market base with the fewest number of models.

Currently, US sales for the Prius stand at about 175,000 units per year. It is by far the best selling hybrid in the world today.