Toyota forced to offer hybrid incentives

After watching the Prius hybrid fly out of dealer showrooms the last six years, Toyota has started to nudge consumers with zero-percent financing and lease deals because supply has caught up with demand. Until recently, most Toyota dealers had waiting lists of two to three months for the fuel-efficient Prius, the most popular gas-electric hybrid model. But at the end of January, dealers had a 30-day supply, or about 10,000 vehicles, based on January sales.

Toyota quietly launched its first incentives on the Prius at the end of last month and has extended the offers until Feb. 28, though it doesn't plan national advertising to promote the program.

Offers include zero-percent interest for 24 months, 2.9% for 36 months, 3.9% for 48 months and 4.9% for 60 months, or a $219 lease for 36 months. Toyota also offers interest rates from 2.9% to 4.9% on the Highlander Hybrid SUV, which has been available with incentives before, as have hybrids from Honda and Ford.

Toyota's incentives come after the automaker sold 107,000 Priuses in the United States last year and increased production capacity in Japan in anticipation of selling 175,000 this year. Toyota expects total hybrid sales in the United States to grow to more than 250,000 this year from about 170,000 in 2006.

"We want to make sure that the hybrid system becomes mainstream. We have to start marketing the car," said Jim Press, president of Toyota Motor North America.

"Eventually, hybrids are going to be on everything" at Toyota. "It's going to be a permanent part of our plans." More at Detroit Free Press