2010 Toyota Prius vs. Honda Insight

Prius vs. Insight: A clash of corporate cultures

Hans Greimel
Automotive News
May 18, 2009 – 12:01 am ET

TOKYO — Few cars better embody the wide divergence in the corporate cultures of Toyota and Honda than these two hybrids.

In one corner is the Honda Insight — a case study in utilitarian expedience. It’s powered by a simplified four-banger with an electric motor adding just enough oomph to cut down on trips to the pump. It sports a plasticky, no-frills interior and poaches parts from sister models.

In the other corner is the redesigned Toyota Prius — a paragon of engineering excellence. It pushes the envelope with an ingenious planetary gear transmission, outstanding fuel economy and snazzy options such as solar panels. The car that made hybrids famous carries a first-class sticker price to match.

For better and worse, the redesigned Prius and Insight exude the distinct corporate identities that gave them birth. The result is as much a battle of the automakers’ business philosophies as a two-car rivalry.

Faultless Toyota Motor Corp. reached new technological heights but drifted into cost creep, a risky trend in a recession. Penny-pinching Honda Motor Co. did a lot with a little, churning out a low-budget hybrid that can’t match its rival’s specs.

Different strokes
The Insight and Prius highlight personality differences between Honda and Toyota.
Honda Insight Toyota Prius
Objective Affordable sticker Fuel-efficiency tour de force
Price No discounting No discounting
Drivetrain Simplify current engine Go high-tech for more power
Bottom line Practicality with compromise Perfection at a price
Pricing policies

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2010 Toyota Prius

The redesigned 2010 Toyota Prius goes on sale in the United States in late May with a base price of $22,750, including freight. The price of the top-trim Prius will be $28,020. Later this year, a stripped-down base model will be offered for $21,750.

The Insight, by contrast, starts at $20,470 and climbs to $23,000, fully loaded. Toyota’s aggressive pricing of the third-generation Prius may pressure margins again. Says Takaki Nakanishi, an auto industry analyst at JPMorgan: “It will be difficult to make a profit at the lower grades.”

Honda and Toyota share a reverence for the principles of kaizen — or continuous improvement — and just-in-time manufacturing. But their subtle differences are best summed in Honda’s pragmatism vs. Toyota’s perfectionism.

Pragmatism vs. perfectionism

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Honda Insight

“Honda always has to prioritize what they can and can’t do because they just don’t have the resources of Toyota,” says Tatsuo Yoshida, an auto analyst with UBS Securities in Tokyo. “If they tried to follow Toyota on development, it would be like committing suicide.”

Take mileage. Honda was satisfied with a respectable EPA rating of 40 mpg city/43 highway for the Insight. But the Prius reached for and attained an eye-popping 51/48.

Honda got there by simplifying an existing 1.3-liter engine to two modes of variable valve timing, instead of three. It chose a one-clutch drivetrain instead of a two-clutch version. That reduced the efficiency of regenerative braking but was cheaper.

The lowest trim-level Insight lacks such staples as cruise control and stability control.

In aerodynamics, the Insight has a 0.28 drag coefficient. Good, but not even as good as the Honda Civic‘s. Yasunari Seki, the chief engineer, was ordered to poach body structure from the Honda Fit compact, a move that limited aerodynamic improvements and also resulted in ho-hum styling. In fact, attention to styling is such an afterthought at Honda that the company doesn’t have a company wide design chief.

The pursuit of expedience is echoed in Honda’s aversion to full-sized trucks and V-8 Acura offerings. Honda can’t be all things to all people so it compromises with the car-based Honda Ridgeline and a V-6 Acura. They may not be best-in-class, but they leverage Honda’s strengths.

“We believe it fits with the culture of our company, where we want to build environmentally friendly cars that get good gas mileage,” says Dick Colliver, who retired recently as executive vice president of sales at American Honda Motor Co. “You don’t have to have a V-8 engine to be Tier 1.”

High-tech luxury

Meanwhile, Akihiko Otsuka, Toyota’s chief engineer, was striving to make his Prius the world’s greenest car. The solution was cutting-edge.

Otsuka used a bigger engine to get better mileage at high speeds. He eliminated drive belts for the air conditioning compressor and water pump, making them electric. He devised an exhaust-heat recapture system to help keep the engine operating at optimal efficiency.

Otsuka also improved drag to 0.25, from 0.26. The new Prius was the world’s slickest production car until Mercedes unveiled its new E-class coupe at 0.24.

The Prius brims with luxury features, most famously the gimmicky solar panels whose sole task is to run a ventilation system to cool the cabin when the car is parked in the sun.

Toyota’s approach mirrors the whole-hog ambition that thrust it into the full-sized pickup segment with the Toyota Tundra and into premium sedans with the Lexus lineup.

“It’s part of Toyota culture to always improve on what it’s already done,” says Chris Richter, of CLSA Asia-Pacific Markets. “It wants to position itself as higher end.”

Honda re-engineered the Insight’s hybrid system to cost 40 percent less than the previous-generation hybrid drivetrain, used in the current Civic Hybrid. Toyota was able to shave 35 percent off the costs of the current generation. But Otsuka missed the internal target of halving the cost.

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Cash For Clunkers Automotive Stimulus

I found an interesting read about a proposed bill about getting older, less fuel efficient vehicles off the road. I hope you enjoy the information.

Cash for Clunkers Car Buying Stimulus Bill//

Cash for Clunkers Car Buying Stimulus Bill

Cash for Clunkers FAQ
By Philip Reed, Senior Consumer Advice Editor

The Cash for Clunkers bill is a proposed federal program that would encourage consumers to trade in gas-guzzlers for new cars that get better fuel economy. Modeled after several programs that have already been successfully implemented in Europe, similar legislation is currently making its way through the U.S. Congress. The program would offer vouchers for consumers, allowing them to save thousands of dollars on a new-car purchase if the new vehicle meets improved mpg requirements.

Edmunds.com has put together this Cash for Clunkers FAQ page to track the program as it comes to fruition, and we’ll be updating this space regularly as new information becomes available.

Though the legislation hasn’t yet passed, we’ve provided some details of the current version of the proposed Cash for Clunkers program making its way through the House. The program would offer vouchers that allow consumers to save up to $4,500 on a new-car purchase. There are also various credits, in the form of vouchers, for trucks and work trucks. The earlier versions of the program that received a lot of media coverage have been reworked, with several objectionable elements having been jettisoned. A former version of the bill stated that the used cars would be crushed, but now the engines and transmissions will be shredded.

Though information from Congress suggests that the program may stimulate anywhere from 500,000 to 1 million new-car purchases, Edmunds.com believes that if properly implemented, the program may stimulate up to 3 million new-car sales. The proposed bill still needs to pass through Congress (and it is likely to be modified again in the Senate), but the president has already expressed his approval of recent drafts of the bill. The House Committee on Energy and Commerce has put together a fact sheet (see below) to detail the key elements of the proposed legislation. We’ve followed that with an FAQ that we will continue to update as details emerge.

Committee on Energy and Commerce Fact Sheet: Cash for Clunkers
Consumers may trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to help pay for new, more fuel-efficient cars and trucks. The program will be authorized for up to one year and provide for approximately 1 million new car or truck purchases. The agreement divides these new cars and trucks into four categories. Miles-per-gallon figures below refer to EPA “window sticker” values.

Passenger car or minivan: The old vehicle must get 18 mpg or less city/highway combined. New passenger cars or minivans with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.

Light-duty truck: The old vehicle must get 18 mpg or less city/highway combined. New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.

Large light-duty truck: New large trucks (pickup trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.

Work truck: Under the agreement, consumers can trade in a pre-2002 work truck (defined as a pickup truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. There will be a finite number of these vouchers, based on this vehicle class’ market share. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000-8,500 pounds.

Summary of Cash for Clunkers Agreement
Minimum Fuel Economy for New Vehicle $3,500 Voucher $4,500 Voucher
Passenger Car or minivan 22 mpg (EPA combined) Mileage improvement of at least 4 mpg Mileage improvement of at least 10 mpg
Light-duty truck 18 mpg (EPA combined) Mileage improvement of at least 2 mpg Mileage improvement of at least 5 mpg
Large light-duty truck
(6,000-8,500 pounds)
15 mpg (EPA combined) Mileage improvement of at least 1 mpg or trade-in of a work truck Mileage improvement of at least 2 mpg
Work truck
(8,500-10,000 pounds)
Trade-in must be at least pre-2002

FAQ

How much are the vouchers worth? This will depend on the car you are turning in and the type of car you buy. In general, if the improvement in fuel economy between your old car and the car you buy is 10 mpg (combined highway mileage according to the EPA), the maximum credit will be $4,500. The requirement for improvement in fuel economy for trucks is lower. For specifics, see the above chart.

How old does my car need to be? There is no age restriction on vehicles eligible for trade in. For work trucks however, it is any built before 2002.We anticipate that most cars traded in will likely be model-year 2000 and older.

What types of vehicles qualify? In general, this bill aims to take polluting gas-guzzlers off the road. The vehicle must have a federal combined city/highway fuel economy of 18 or less miles per gallon. This means that many American-made cars and trucks will be eligible for vouchers toward the purchase of new vehicles. The categories of vehicles that will qualify fall into four classes: passenger cars, light-duty trucks, large light-duty trucks (6,000-8,500 pounds) and work trucks (8,500-10,000 pounds).

What kind of mpg will the new vehicle need to get? Different levels of improvement are required for each type of vehicle. In passenger cars, if mileage is improved by 10 mpg, the $4,500 voucher is awarded; if fuel economy is improved by only 4 mpg, the $3,500 voucher is awarded. The mileage improvement levels and voucher amounts for the different classes of trucks are listed in the chart above.

The proposal mentions a one-year time limit. Is there a cap on the number of vehicles? The bill is written to provide vouchers for 1 million purchases. However, we are predicting that the program has the potential to stimulate up to 3 million sales. For this reason, it is important for consumers who are interested in taking advantage of this program to track the progress of the bill and apply for the program as soon as funds become available.

How long do I need to have owned the vehicle I’m trading in? The vehicle must be registered in your name and in use for at least one year.

If I have an older car that is in good running condition, or a classic car, is it mandatory for me to turn it in? No. This program is completely voluntary.

What happens to the car that you trade in? The old car is given to a salvage operator. Vital engine and transmission components, that would otherwise pollute more than a modern engine, are destroyed so that the car does not end up on the road again. The salvage operator can then sell off any remaining parts on the vehicle. The destroyed engine and transmission can also be sold to recyclers.

How will this affect used-car values? Since the “clunkers” will be taken off the road, there will be fewer older vehicles in the marketplace. However, our analysts don’t expect this program to drastically affect used-car values.

Where do I find the mpg numbers to see if my vehicle qualifies for the Cash for Clunkers vouchers? The EPA’s combined mileage will be used. This is a combination of the highway and city mileage for vehicles. Models prior to 2008 will use the converted MPG numbers which take into account the new EPA testing methods. This information can be found on the window sticker of the car or at fueleconomy.gov.

What kind of vehicles qualify as light-duty and large light-duty trucks? Trucks qualify based on class and vehicle weight. For example, the Ford F-150 would be considered a light-duty truck. If you are considering taking advantage of this program, look up your vehicle on Edmunds.com and determine its weight. If it is between 6,000 and 8,500 pounds and gets less than 15 mpg, you have a large light-duty truck and will need to buy a truck that improves your fuel economy by 1 mpg for a $3,500 voucher. If you select a truck that improves fuel economy by at least 2 mpg, you will qualify for the $4,500 voucher. A work truck is classified as being between 8,500 and 10,000 pounds. The only requirement for this class is that the trade-in vehicle needs to have been built before model-year 2002.

As the program details emerge, check back here for a complete list of eligible vehicles.

When is the program expected to go into effect, and will it be retroactive? The language of the bill hasn’t been finalized, but the program is expected to have a retroactive date of March 30, 2009. However, you must be able to prove that you were the registered owner of the vehicle and that the old car has been scrapped. Passage of this bill could come before June and the vouchers would be available shortly thereafter. The current House legislation has been folded into a broader energy package and will be in committee for another two weeks as of this writing. Then it goes to the Senate, where it undoubtedly will go through changes.

Where will the money for vouchers come from? Since President Obama wants this to move as quickly as possible, it is likely that the money will come from the already approved Troubled Asset Relief Program (TARP) funds and the economic stimulus package.

Does the voucher augment or replace what the dealer would give me for my trade-in? The money you receive from the Cash for Clunkers program will act as your trade in value. It cannot be combined with the dealer’s trade in offer. This program is primarily designed to inflate the value of older vehicles worth less than $4,500.

Is there a limit on the price of the vehicle purchased with Cash for Clunkers vouchers? Vehicles purchased with the vouchers must have an MSRP of $45,000 or less.

How will the program be tracked? Via dealers or the DMV? Little information has been made available on this aspect of the bill. It is likely, though, that the Vehicle Identification Number (VIN) will be the prime tool in verifying information on the trade-in vehicle such as model year, engine size and the corresponding EPA-rated fuel-economy levels. The government has numerous databases with information on cars that are tracked through their VIN.

How will you get the money toward the trade-in? An electronic transfer from the government to the dealer will be issued once a vehicle is determined to be qualified for the Cash for Clunkers program. The voucher amount would be credited as all or part of the down payment on a qualifying new car.

Will it apply to used-car purchases? The final details of the bill are not yet available. However, it has always been assumed that the vouchers will only apply to new car purchases.

What if you’re leasing a vehicle and wish to trade it in? Again, final details are not available. But it is unlikely that consumers who are currently leasing vehicles will qualify for this program.

What if you wish to lease the new vehicle? In this case, it appears likely that the voucher could be applied to a leased vehicle as a “capitalized cost adjustment.” This would lower the price of the vehicle and thus reduce the monthly payment of a lease.