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1st month Prius sales hit 180,000 in Japan

TOYOTA Motor Corp got 180,000 orders for the new Prius hybrid in Japan in just a month, far surpassing its target of 10,000 vehicles in monthly sales, the auto maker said yesterday.

The third-generation Prius, which rolled out a month ago, has been a big hit in Japan, partly because of tax-breaks and other new government incentives that are meant to perk growth during the nation's downturn.

The Prius was the No. 1 selling vehicle in Japan for May, clinching the top spot in the domestic market for the first time and overtaking Honda's new hybrid, the Insight, which fell to third after taking the top spot in April.

Price war

Competition in the hybrid vehicle market has intensified after the Insight debuted in February in Japan at 1.89 million yen (US$19,700). Toyota is offering its new Prius at just over 2 million yen, about 300,000 yen cheaper than the previous model.

The upgrade has a larger 1.8-liter engine but gets better mileage than the older one.

The new Prius is just starting to arrive in the United States, where sales for last month totaled just 700. Dealers are still selling mostly the second-generation Prius.

Strong hybrid sales are a rare bright spot for Japan's auto makers, which have been battered by the global slowdown, a strengthening yen and the US credit crunch.

Toyota, the world's biggest auto maker, which also makes the Camry sedan and Lexus luxury models, recorded its worst loss in its seven-decade history for the fiscal year ended March.

In Japan, hybrids are now tax-free, delivering savings of about 150,000 yen for a Prius buyer. Other fuel-efficient models qualify for lower savings.

Also helping is a "cash-for-clunkers" program similar to the plan initiated by US President Barack Obama, which offers vouchers worth up to US$4,500 when trading in a gas-guzzler for a new car.

In Japan, people who trade in a car over 12 years old get a 250,000 yen rebate for buying an ecological model. Those without a trade-in get 100,000 yen.

Toyota is also continuing to sell the old-style Prius in Japan at the same price as the Insight, a relatively unusual strategy as old models are usually discontinued.


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