Honda's Prius-killer selling well in UK, Japan

In its first month on the market, the Insight has outsold its chief competitor, Toyota's Prius, by 229 units to 198.

Starting at £15,490 ($31,600), it undercuts the £18,370 ($37,500) Prius by nearly £3000 (just over $6000). Like the Prius, its fuel economy also helps minimise road tax in the UK. Road tax on the Insight and the Civic Hybrid is £15, compared to £140 on a conventional petrol-engined Civic. Hybrids are also exempt from London's £8 a day congestion charge.

Honda estimates buyers will see residual values of around 44 per cent, while business users will also gain by reductions in benefit-in-kind tax and insurance payments, combined with higher write-down allowances.

The company expects to sell around 7,000 Insights in the UK in 2009 and about 200,000 worldwide.

But they may be in for a pleasant surprise. When it went on sale in Japan in February, the car reached its first-month sales target of 5000 in a week, and sales exceeded expectations by about 200 per cent with 21,000 orders placed in its first six weeks.

While the initial signs of the Insight's success boost the case for the car to come to Australia sooner rather than later (more here), there's a catch 22 here, relating to global demand. If demand for the Insight outstrips supply, that could delay the car's local introduction.

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