Toyota ups ante in green car race with Yaris-based hybrid

From Automotive News:

By Hans Greimel
TOKYO -- The green car race between Toyota and Honda is heating up.
Toyota Motor Corp. plans a new small hybrid car to take on the Insight, the inexpensive Honda hybrid that just reached the United States.
The small gasoline-electric car being planned will be an low-priced spinoff of the Toyota Yaris, said Akihiko Otsuka, chief engineer of the redesigned, third-generation Toyota Prius.
"We are developing a low-priced hybrid vehicle like Honda's Insight," Otsuka said. "We are going to compete by expanding our hybrid-vehicle lineup to smaller hybrids, in the class of the Vitz [sold in Japan] and Yaris." He did not say when the small hybrid would debut, but it could arrive as early as 2011, according to Japan's Nikkei business newspaper.
Toyota's plan is the clearest sign yet that it is worried about the inroads that its domestic arch rival is making into small, low-priced hybrid vehicles. The Honda Insight, which starts at around $20,000, is selling briskly in Japan and will be followed by a hybrid version of the Fit compact.