New Prius Changes May Have Risks For Toyota (TM)

Have you tried going into a Toyota dealership to buy a new or used Toyota Prius over the last 12 to 18 months?  If you said yes, then you know you can’t really get one unless you put your name on the list long ago.  Toyota Motor Corp. (NYSE: TM) landed itself with a huge winner in its hybrid sales.  Many comment that the Prius isn’t that pretty to look at or that they think it is "Too ECO" which was a quote from a salesman at a dealership.  But now the Prius climbed passed that image.  In fact, it’s gone so far now that owning a Prius is now cool.  Regardless of which side of the fence you are on about green and envionmental cars, the Prius is one of the few hybrid cars that buyers who drive 8,000 to 12,000 miles per year can be certain that they are going to get their money’s worth in premium paid versus fuel cost savings over time.

Used Prius cars sell for a premium too, and in some markets like Houston throughout2007 people were literally buying used Prius cars, putting them on acarrying truck, and selling them forward in California for a nicepremium. If you go straight to Toyot’a Prius site and see the MSRP of$21,500.00, it would be a safe bet that you can not find one foranywhere close to that.

But now comes the risk of buying a Prius today, sort of.  Toyota isplanning a third generation Prius launched in 2009 for the 2010models (estimates of course).  Toyota’s Lexus is also said to be about ready to launch ahigher-end version of the Prius that is both larger and has more powerand features inside it. But the 2010 models of Prius are supposed tohave better batteries with lithium-ion batteries that offer more juiceand more power that will more or less coincide with other launches ofplug-in cars and other hybrids.

MOTOR TREND shows a picture of the Lexus concept car.

While the company has to strive for new improvements and while thepromises are supposed to very positive, you know some Prius owners arehoping that there aren’t too many body style changes coming to the basePrius third generation model.  If the body style changes too muchthrough time, those "oh so cool" cars could run the risk of becoming"so yesterday" quicker than you get off the waiting list at thedealership.

Do we think the car company will really kill its winning bet?  No. If this was an American Big 3 car company we might worry about that as a serious risk, but this is Toyota. The company has been so good at its execution that you might even think everything it does has Teflon attached somewhere.

Jon C. Ogg
August 14, 2008