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Honda Deals with Prius Envy

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Washington DC August 28, 2007; The AIADA newsletter reported that in the low-octane race for the environmental high ground, Honda is running a distant second to Toyota.

With 110,565 sold so far this year, the Toyota Prius is outselling Honda's entire lineup of gas-electric Civics and Accords by five to one.

"The Prius has become synonymous with hybrid; it's the Kleenex of hybrids," Honda senior VP John Mendel told MSNBC. "We feel Honda should be synonymous with the most fuel-efficient company in America."

That's why Honda is revamping its hybrids. Honda execs say their new hybrid will be a five-passenger, small family car priced under $22,000. Analysts expect the new Honda will have the larva styling the Prius pioneered—which now embodies the green-car look.

Honda will also outdo the $23,000, 60mpg Prius on price and mileage in hopes of attracting 100,000 buyers a year—three times what the hybrid Civic sells.

Meanwhile, Toyota's U.S. president, Jim Press, says his company is looking to create an entire Prius car line, with different models all carrying the Prius badge. "Ten years ago people tried the Prius because it was a Toyota," says Press. "Today, people are buying Toyotas because we have the Prius."

Click here for more on Honda's plan to compete.