Toyota's fuel-thrifty Prius family may shrink as automaker ponders strategy

In early 2011, as Toyota was set to spread the Prius name to the subcompact C, the V station wagon and a plug-in hybrid, the automaker issued a bold prediction: the Prius family of vehicles would be Toyota's best-selling nameplate in the U.S. by the end of the decade.

To do that, the Prius would need to usurp the Camry and its gargantuan sales volumes, as well as fellow heavyweights Corolla and RAV4. It was a good time to make such a bet. Gasoline prices had been climbing steadily since 2008 and the Prius name was steeped in loyalty and reputation as the industry's go-to vehicle for fuel thriftiness.

Five years later, things have changed.

The Prius family has nearly a million total U.S. sales to its credit since 2011, but the Camry, Corolla and RAV4 each outsells everything with a Prius badge by hundreds of thousands of vehicles annually. Even the Tacoma pickup came within a few thousand of the Prius family in 2015.

This has Toyota executives readjusting their Prius expectations for the rest of the decade. The futures of the next-generation C and V in the U.S. are undecided, particularly the V, which they say could be replaced by the new RAV4 Hybrid.

But Toyota has no regrets on bringing the C and V to the U.S. under the Prius banner -- the only market where the automaker did so.

"I think it went really, really well," Jim Lentz, CEO of Toyota North America, told Automotive News about the effort to expand the Prius family. "There is so much brand equity in the Prius name, you would have been crazy not to build a family around that."

"Prius" and "fuel efficient" have been used interchangeably since the nameplate arrived in the U.S. in 2000. And Prius buyers are loyal, too -- about a third of owners return to buy another, according to data from TrueCar.com.

Despite the C and V using different names in other global markets, bringing them to the U.S. under the Prius name made sense, says one industry observer.

"Prius has universal awareness that's just not common in the automotive world," said Karl Brauer, senior director of insights for Kelley Blue Book. "There's just no denying it's achieved that fairly unique status where everybody knows it."

Another analyst notes that Toyota is unlikely to overreact to short-term conditions such as gasoline prices.

"Toyota has always demonstrated a very, very long-term attitude towards their powertrain planning," said Ed Kim, vice president of industry analysis at AutoPacific. "They're not doing plans based on what fuel prices will be next year."

Since broadening the Prius line in 2011 and 2012, Toyota has sold 999,516 vehicles across the lineup in the U.S. Two-thirds of those sales -- 657,245 -- have been the regular Prius liftback, according to Toyota sales reports.

The C -- whose drivetrain differs from the other models' -- was introduced in 2012 and has sold 156,766 through 2015.

The V -- essentially the same car as the liftback with a bit more cargo space and less impressive fuel economy -- has sold 143,212 copies since going on sale in 2011.

The plug-in hybrid has been the quietest, with 42,293 total sales over the past four years.

The Prius family's best year was 2012, and sales have declined since. The regular liftback's age shares some of the blame; after some delays a redesigned fourth generation went on sale in January. Lentz expects 2016 sales will be up about 30 percent from their 113,829 total in 2015.

But consumers' unending appetite for light trucks plus cheap gasoline mean the Prius isn't the darling of the showroom that it once was. Toyota knows its original goal from 2011 is no longer possible, and it's recalibrating expectations.

"Given all the changes in consumers' preferences right now, I don't think we're forecasting the Prius to be our top volume seller anymore," said Bill Fay, Toyota Division general manager.

Toyota plans to "reinvest" in the C and V, Fay confirmed, but he said it was too early to say whether they'd be back for a second generation in the U.S.

The future of the V in particular will also depend on a new hybrid in Toyota's quiver -- one without the Prius name: the first RAV4 Hybrid, which went on sale at the end of 2015.

While the RAV4 Hybrid's fuel economy of 34 mpg city/31 highway/33 combined can't match the Prius V's 44 mpg city/40 highway/42 combined, it comes with a potent combination of practicality, more style and all-wheel drive.

"We'll have to see how well the RAV4 Hybrid does," Lentz said. "Because the RAV4 could really take the place of the Prius V."

The Prius family "absolutely" lived up to expectations, according to Mike Sullivan, owner of the 10-store LAcarGuy network of dealerships in Southern California.

"The whole Prius thing needed to be rounded out," Sullivan said. "Even if the customer still chose the classic Prius, having the V and the C to compare it to helped from a marketing standpoint."

Sullivan says losing the V while keeping the C would be fine with him.

"The C has been a good addition," Sullivan said. "I think perhaps the V was the one that was less spot-on and that you could roll [it] into the RAV4 Hybrid."

Whereas the C was easy to characterize -- a subcompact city car with a price that lured younger buyers -- the V was a harder sell, Sullivan said. Its size wasn't that different from the Prius liftback, its fuel economy was worse and there was no awd option to counter competition from a brand such as Subaru.

Their future abroad is more assured. The C is sold as the Yaris in Europe and as the Aqua in Japan, where it's been the most popular car from 2013 through 2015. The Prius V is known as the Prius+, a seven-passenger multipurpose vehicle, in Europe.

Regardless of what returns and what gets cut, and how low gasoline prices might sink, the Prius name is still golden in Sullivan's book.

"It's like Kleenex or Coca-Cola or Clorox," Sullivan said. "It's become the ubiquitous brand for the hybrid leaders. I wouldn't change that for anything."