Can Prius Catalyze Toyota’s Recovery?

Toyota (NYSE:TM) pared down its classic Prius hatchback to come up with a completely new model, and now the “c” may be giving the same treatment to sales of other cars. Toyota’s new fuel-efficient Prius c sold more cars in the first three days of its release than General Motors’ (NYSE:GM) electric hybrid Chevy Volt and the electric Nissan Leaf did in all of February. Plus, it’s making people look. auto analyst Jessica Caldwell says the new Prius is “already the third most considered vehicle in the subcompact segment with 10 percent of those shoppers taking a look.”

“This is pretty significant because awareness is generally low when a vehicle launches so the fact it came on so strong shows a lot of interest and market receptiveness,” said Caldwell

The “c” is getting serious looks in online searches from those people shopping for the Volt and the Leaf, as well as Honda’s (NYSE:HMC) Insight hybrid.

The Prius, in slightly alarming news for the company, may even be hurting sales of other Toyota cars. Caldwell found that more than 11 percent of the buyers looking for information on the larger Prius v station wagon and more than 5 percent of those researching the new Camry hybrid are spending time looking at the “c.”

The Prius “c,” a five-door hatchback, is the smallest hybrid in the Prius family, gets about 50 miles to the gallon, and starts at $18,950. The “c” is shorter and narrower than the classic Prius hatchback, whose buyers have also begun eying the smaller car designed for driving in traffic-congested cities and for easy parking.

During 2011, Toyota sales fell 6.7 percent in the U.S., largely due to supply disruptions resulting from a March earthquake and tsunami in Japan. However, the decline in sales for the company contributed to its losing its top spot in global annual vehicle sales to General Motors. Can the new hybrid hatchback be Toyota’s trump card as more and more people start looking for fuel efficiency?

To contact the reporter on this story: Aabha Rathee at

To contact the editor responsible for this story: Damien Hoffman at