Toyota sees opening for Prius brand

By Kevin Krolicki and David Bailey

DETROIT (Reuters) - Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) is considering selling a family of Prius-branded hybrids with dedicated areas in dealerships to showcase the expanded line-up, a senior executive said on Tuesday.

"You could have a series of derivatives under the Prius brand name that would allow you to market product at a much lower cost," Jim Lentz, Toyota's North American sales chief, told the Reuters Autos Summit in Detroit. "There is a definite desire for us to do that."

Currently the sold-out Prius is offered as just another model in Toyota showrooms.

Toyota's market-leading Prius hybrid has been a sellout success for the Japanese automaker, which is converting a plant under construction in Mississippi to build the next generation of the vehicle.

Toyota, the world's largest automaker by sales, plans to unveil its third-generation Prius and a new dedicated hybrid model for its luxury Lexus brand at the Detroit auto show in January. It also plans a plug-in version of the Prius.

U.S. sales of the Prius have been down 4 percent through August in 2008 because of supply constraints. Toyota expects to sell about 175,000 Prius hybrids in the United States this year.

Overall, Toyota aims to sell more than 1 million hybrids per year globally by early next decade, and would need to sell more than 600,000 hybrid vehicles of all types in the United States to meet that target, Lentz said.

"To do that effectively, I think we need dedicated hybrids and I would prefer them under the Prius name," said Lentz, president of Toyota Motor Sales.

The automaker also was working with dealers to set off areas of its U.S. showrooms targeted at specific customer interests. That extends a trend Toyota began when it launched the youth-oriented Scion brand in the U.S. in 2003.

Lentz said that dealers, working with Toyota to expand and improve their showrooms, already had the space to accommodate an expanded Prius lineup.

"They are being constructed with different zones based on customer interest," Lentz said of the Toyota dealerships.

He said those set-off areas would include space for truck buyers, and its Scion brand, as well as for the Prius.

(Reporting by Kevin Krolicki and David Bailey, editing by Lisa Von Ahn and Carol Bishopric)