Toyota Introduces a Cheaper Prius

2008 Toyota Prius

Washington DC July 31, 2007; The AIADA newsletter reported that Toyota Motor Corp. said Monday that it would introduce a new "standard" version of its popular gas-electric hybrid for the 2008 model year with a base price of $20,950.

That's 5.5%, $1,225, less than the lowest-cost 2007 model, but some equipment that came with that model, such as cruise control and heated rearview mirrors, will be optional on the new standard.

"We're just trying to make it available for everybody," Bill Kwong, a spokesman for Toyota, told the L.A. Times. The new models will be in dealerships in August.

Toyota is boosting production of U.S. bound Priuses by almost 50% to an annual rate of 150,000. That's giving buyers more bargaining room, and this spring Toyota began offering discounts of $600 to $2,000 a vehicle on common options packages.

The car also is facing increasing competition as other automakers roll out hybrid vehicles and competing fuel-saving powertrain options, such as clean diesels.

In addition, the federal tax credit available to Prius buyers has shrunk from $3,150 a year ago to $787.50. The credit will disappear altogether Oct. 1, 2007.