TOKYO Toyota Motor Corp (7203.T) plans to develop a new hybrid car that will sell for less than 2 million yen ($20,510) to rival a popular hybrid car launched by Honda Motor Co (7267.T), the Nikkei business daily reported on Friday.
Honda last month launched its new Insight hybrid in Japan at 1.89 million yen, and has enjoyed very strong demand for the gasoline-electric vehicle.
Toyota plans to launch the new hybrid as early as 2011 at a price about 20-30 percent cheaper than the popular Prius hybrid, which starts at 2.33 million yen, the Nikkei said.
The new hybrid will also likely be a subcompact with an engine smaller than the Prius' 1.5 liter engine.
Toyota declined to comment.
(Reporting by Nathan Layne)