Honda sets US price for Insight $ 2,200 below Prius

Soon after  Japan’s second-largest automaker, Honda Motor Co. unveiled its latest car Insight hybrid, the price tag has been announced as well. The car is priced at $2,200(in the U.S) below the least expensive version of Toyota’s top-selling Prius.

Honda aims to cut down its competitor, Toyota Motor Corp.’s dominance in the gasoline-electric auto sales segment. The 2010 Insight will hit the stores on March 24th starting from $19,800, the price for the base model LX to $23,100 for the top-end version. On the contrary prices for 2009 Prius go from $22,000 for a base model to $27,765 for the Touring version.

“Initially, the lower price won’t matter too much,” said Alan Baum, director of automotive forecasting for Planning Edge in Birmingham, Michigan. “They’re positioning for the midterm, for when the market improves. They think there’s a sweet spot at a lower price point” than Prius.

The Insight Hybrid came into the lime light within a month of its debut. It also hit the charts for the highest selling cars in Asia. The new Honda hybrid is set to go on sale in the United States this month.

U.S. hybrid sales fell 30 percent in the year’s first two months to 31,466, as total auto purchases tumbled 39 percent.

Capitalizing on this downfall Honda looks to capture the US market by the reduction in the price.

Demand for gasoline-electric models also has weakened as the average gasoline price has slid 40 percent from a year earlier to $1.94 a gallon. This however has also been a reason for the downfall in the sales.

The Prius, however is a notch ahead of The Insight in terms of fuel economy with 46 miles-per-gallon in city-and-highway combined driving, compared to 41 miles per gallon for the Honda model. But with the success Honda has enjoyed in the Asian continents it might just give The Prius a good fight.

“I think what they are looking to do is to bring a new buyer to the marketplace for hybrids, people who are interested but maybe couldn’t afford the Prius,” said Jack Nerad, analyst at Kelley Blue Book, a leading vehicle pricing guide.

“I think it’s clear that they want to make this seem like a more attainable vehicle,” commented Karl Brauer, editor of auto tracking Web site Edmunds.com. “I think they’re doing what it takes to make  hybrids seem more real world and less niche.”

With sales hitting almost 159,000 for the Prius Hybrids, it remains to be seen how Honda would give a fight to its rival.