The Prius Effect: Learning from Toyota

Will Ferrell’s comment is representative of statements that are voiced at cocktail parties, in family gatherings, and around office water coolers across America, wherever Prius owners are present. Prius owners extol the virtues of their automobiles at length, to anyone who will listen. They post on automotive message boards, write letters to the editor, urge their friends to test-drive and buy.
Each driver defines the vehicle’s merits slightly differently, but all of them use their experiences with the Prius—in an industry that has symbolized American culture since Ford’s Model T—to tell a personal story that incorporates the values of environmental sustainability.
The Toyota Prius is not the only hybrid vehicle on the United States market. It was not even the first to be sold. But without question, it symbolizes hybrid vehicle technology to most American but appealed only to a niche customer segment. A small group of ultra-green consumers and automotive innovators were the only people willing to pay a premium for a car slotted between Toyota’s economy Echo and compact Corolla.
Within the first year, approximately 15,000 Prius vehicles were sold, a small number compared to almost any other automotive introduction. Uncertainty surrounded the success of the hybrid campaign and an expensive ten-year R&D program. But Toyota recognized the vehicle’s societal and corporate importance, and the company remained determined to create a winner. In 2004, a newly designed Prius was introduced to the United States—and was named the Motor Trend Car of the Year. Within a few months, the Wall Street Journal reported an order backlog of 22,000 units.
By 2006, the Prius was a starring character in Hollywood: George Clooney and others walked onto the red carpet from their Priuses at the Academy Awards, and the car was appearing in cameos on various television shows and movies. On Curb Your Enthusiasm, the Hollywood-spoofing HBO comedy series starring Seinfeld creator Larry David, a Prius became a recurring plot element. Today, the backlog has increased even further, and the wait time for a new Prius can be more than six months in parts of the United States. And purchasers typically pay the full manufacturer’s suggested retail price, or even a premium.

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