Toyota plans to produce a small hybrid car, based on the Yaris, to take on Honda's recently launched Insight. The Insight, which Toyota executives have labeled a "mild hybrid" is cheaper than Toyota's "full hybrid" Prius.
"We are developing a low-priced hybrid vehicle like Honda's Insight. We are going to compete by expanding our hybrid vehicle lineup to smaller hybrids, in the class of Yaris," the chief engineer for Toyota's third-generation Prius Akihiko Otsuka told Japan's Nikkei business publication.
The Yaris hybrid will be cheaper than the Prius although Honda reportedly also plans to launch a hybrid version of its Jazz in Japan.
There is a possibility that Honda's Insight may be launched in South Africa in the future.