Honda sets hybrid price below Prius

LOS ANGELES - Honda Motor Co., aiming to cut into Toyota Motor Corp.'s dominance of gasoline-electric auto sales, set the US base price of its new Insight hybrid car $2,200 below the least expensive version of Toyota's top-selling Prius.

The 2010 Insight goes on sale March 24 with a range from $19,800 for the base model LX to $23,100 for the top-end version, the Tokyo-based company said. Prices for the 2009 Prius go from $22,000 for a base model to $27,765 for the Touring version, according to Toyota's website.

"Initially, the lower price won't matter too much," said Alan Baum, director of automotive forecasting for Planning Edge in Michigan. "They're positioning for the midterm, for when the market improves."

Honda and larger rival Toyota are stepping up competition in fuel-efficient hybrids, even as US sales of all cars and light trucks keep falling from 2008's 16-year low. Toyota later this year plans to introduce a revamped Prius with higher mileage.

US hybrid sales fell 30 percent in the year's first two months to 31,466, as total auto purchases tumbled 39 percent. 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, according to AAA.

The Prius accounted for 50 percent of all gasoline-electric models sold in the United States in 2008.