Lessons for cleantech marketers in the Tale of Two Priuses

Prius Japan Sales full year 2009 re-size

You don’t see change like this often.

AfterToyota’s Prius has carved out a niche in markets and stayed there, except one. In Japan, after years of modest sales, Prius leapt to the top of the sales charts in a single bound. What does the Tale of Two Priuses mean for cleantech marketers?

In all markets Toyota priced its Prius at a premium to cars in its category. Prius offered the highest gas mileage and lowest CO2 emissions. Innovators and Early Adopters have shown time and again that they will pay for performance. The early movers ramp up production which brings down costs. Then prices can be lowered to tap the price-sensitive majority without harming margins.

Of course Toyota faced some complications. It would be awkward if the low-margin Prius took share from its own higher-margin Camry. Or production costs were higher than expected so sales in the niche market failed to reach the economies of scale needed to cut prices.

Whatever the factors Toyota left the price premium on the Prius. Sales stagnated until the Japanese government reduced taxes on the most fuel-efficient cars in May 2009, and the price of gasoline ticked up. Prius became a top performer in total cost of ownership. The sales chart shows what happened. Prius became the best-selling car in Japan.

(next: What happened in the US, and what it means for cleantech product positioning and pricing)


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