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Toyota slashes Prius price in China

After more than two years of sinking sales of a vehicle that is wildly popular everywhere else, Toyota finally decided to slash the price of its hybrid model Prius in China in early March, cutting prices by about ¥22,400 ($3,150), to ¥259,800.


 


Only 312 copies of the hybrid model were produced and 414 were sold in the whole of 2007, according to CBU-Autostats.


 


Assembled locally at an FAW-Toyota plant in Changchun, it was priced at just under $40,000 when it first entered the market in 2006. The company has never made an ambitious sales plan for the Prius in China. It set its first year sales target at just 3,000 units, and actually sold fewer than 1,500. Sales fell below 1,000 in 2007, and the numbers seem to be getting smaller this year as well.


 


The recent price cut amounted to 7.9 percent, but it remains a question whether it is deep enough to convince more customers into buying the hybrid model.


 


FAW-Toyota¡¯s Changchun plant has an annual capacity of about 3,000 units, yet only one-third of it has been actually utilized. In spite of the slump in sales, Toyota stuck to its price for more than two years. Why Toyota decided to insist on prices about 60 percent above what it charges for the Prius almost everywhere else in the world, it has never explained.


 


Few potential Chinese buyers are interested in a non-luxury hybrid car, which carries a luxury price tag.


 


According to a report in Shanghai Daily, an official from FAW-Toyota, producer of the Prius, said that ¡°mature¡± production technology enabled the companies to cut the price. However, whether it is enough to drive up sales is another question.

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