A less-pricey Prius

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Toyota, apparently spooked by the arrival of the budget-priced Honda Insight hybrid in showrooms last month, is shaving $1,000 off the sticker of the Prius.

Faced with a collapse of the hybrid market and the arrival of the Insight with its $19,800 base price, Toyota blinked and decided to cut the price of the 2010 Prius to $21,000, down from a base price of $22,000 for the 2009 model, according to Bloomberg News.

Toyota plans to announce the pricing on the new Prius on Tuesday, and the car — the first full redesign of the Prius since the ’04 model year — should start showing up in Southern California showrooms in late May.

How many Toyota will sell is another question. Hybrid sales have plummeted along with gas prices, and the Prius hasn’t been immune to the trend. Sales fell 56% in March compared with a year ago, and dealers were reporting 80 days’ worth of inventory — a far cry from last summer when every Prius basically disappeared from dealer lots as fast as it showed up.

UPDATE: Toyota confirmed today that there will be a base 2010 Prius priced at $21,000, but that it won’t go on sale until later this year. The Prius that arrives in dealer showrooms next month will start at $22,000, the same as the 2009 model.

-- Martin Zimmerman