US sales stall, but Prius is still big in Japan

Toyota's iconic Prius, beloved by environmentalists and right-on movie stars, saw its mainstream status well and truly cemented this week following reports from one dealer group that it was the best-selling car in Japan during May.

The figures show that Japan's attempts to kick-start its flagging economy and car industry may be working – for Toyota at least – with the Prius topping sales charts from the Japan Automobile Dealers Association, having sold about 10,915 cars in May.

Close behind the Prius was Honda's Fit compact with sales of 8,859 cars, with another hybrid, Honda's Insight, in third place with 8,183 cars sold.

The Prius's success was attributed to the release of a new, cheaper model last month retailing at about $3,000 (£1,850) less than the previous model.

However, while Toyota may be enjoying mainstream success in Japan, it is continuing to struggle in the US, where the company has been hit by the slump affecting the entire auto industry.

Despite claims that Americans turning their backs on gas-guzzlers have contributed to the present dire straits faced by GM and others, Toyota's latest sales figures point to a stagnant market for more efficient Japanese models as well.

Sales of the Prius in the US were down from 15,011 in May 2008 to just 10,091 for the same month this year. For the year to date, sales of the Prius in the US stand at 42,753 compared to 79,675 in 2008 – a drop of more than 45 per cent.

However, despite falling demand, the company remained optimistic about the outlook for the US market. "The big jump in consumer confidence in May translated to a solid gain in retail vehicle sales compared to April," said Don Esmond, senior vice president of automotive operations at Toyota Motor Sales.

"We are encouraged that consumers are beginning to return to showrooms and that the industry continues to show signs of stabilisation," he added.