Tokyo, Japan – Toyota is planning a new, small, low-priced hybrid based on the Toyota Yaris, according to a report in Automotive News. The new car is intended to take on the new Honda Insight, the report suggested.

The announcement was made by Akihiko Otsuka, the chief engineer of the redesigned, third-generation 2010 Toyota Prius. The new hybrid would be in the class of the Yaris and the Vitz, a model sold in Japan.

Otsuka did not say when the new hybrid would be launched, but a Japanese newspaper said it could arrive as early as 2011.

The Honda Insight is “selling briskly in Japan,” the report said, and will be followed by a hybrid version of the Fit compact, known in international markets as the Jazz. In comparison, the Prius is a larger, more expensive model with several premium options. The new Toyota hybrid would be smaller and less expensive than the Prius.

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