The world’s top automaker, Toyota (NYSE:TM), is going to introduce a taxi version of Prius, its signature hybrid gasoline electric car in Korea’s taxi market. Toyota is the first foreign car maker to make a big move in Korea’s taxi market especially when no local or foreign auto maker has yet launched a hybrid taxi in the country. Most of the taxis in Korea run on liquefied petroleum gas because of high tax incentives. With the price of the fuel rising, diesel and electric vehicle are more in demand.
The edge over competing vehicles
Toyota expects that Prius taxi will be a popular deal because of its superb mileage of 21.7 kilometers per liter in the city. Prius is an environment-friendly car and will contribute to a clean environment. Other features like quietness of the car, active headrest and safety features like seven SRS airbags are also available in the car. All taxis in Korea have been instructed to have safety airbags especially in the front seats.
- Warning! GuruFocus has detected 4 Warning Signs with TM. Click here to check it out.
- TM 15-Year Financial Data
- The intrinsic value of TM
- Peter Lynch Chart of TM
In Korea, the biggest supplier of taxi’s are Hyundai Motors (HYMTF) and Kia Motors, they are responsible for Korea’s two-thirds local auto market. Prius taxis are already doing well on the roads of the U.S., Japan, Singapore, Croatia and Austria. The biggest appeal for Prius Taxi’s will probably be its fuel efficiency. Hyundai, launched its new Sonata taxi recently. The mileage offered by Hyundai taxis is 9.6 kilometer per liter which is almost half of what Prius claims to offer.
The biggest disadvantage the Prius taxis could face in comparison to other taxis is the sticker price. The price is much higher than other taxis running on the roads of Korea. The latest Sonata taxi launched, starts at 16.35 million won whereas Toyota is offering Prius for 26 million won. The difference in price between the two cars is huge. Many of the taxi drivers at Seoul Association feel that fuel efficiency while purchasing a taxi is the most important aspect to look out for, and this could work in favor of the Japanese major. Toyota also feels that even though the price charged is high over other taxis, but the features that the company is offering justifies it.
Ford (NYSE:F) is also planning to introduce new hybrid gasoline electric car by 2018 to contend Toyota’s Prius. The second-biggest American automaker is planning to offer different body styles with its new hybrid invention in the same way as Toyota does with Prius. Toyota, too, is planning to launch the fourth generation of Prius by the end of this year. Ford’s hybrid will be launched 21 years after the original Prius was launched in Japan.
Toyota is the leading producer of hybrid cars, thanks to its strong offering Prius. With the sale of Prius Taxis in Korea, the top brass of Toyota will also give hybrid education to drivers and companies. Toyota’s biggest aim is to allure the Korean drivers with Japanese cars even though many are lured by European brands like Mercedes and BMW. The price of the Prius Taxi might be high in comparison to other taxis, but one time investment is better than daily spending a bomb on the fuel cost.