Toyota, major Japanese Automobile Manufacturer, has put the launch of Prius, the world's first mass-produced hybrid vehicle on hold, owing to a steep duty structure and inability to fix a competitive price.

Toyota was working on bringing Prius at a price tag of Rs 20-22 lakh. But Honda is already offering the Civic Hybrid at Rs 13.36 lakhs, a price which makes Prius a bad deal for the end customer. Honda recently reduced price of Civic Hybrid by Rs 8 lakh due to low demand.

Toyota and Honda are the leading manufacturers of hybrid vehicles globally, and Toyota Prius (launched 11 years ago) is the market leader. The hybrid cars, which use both petrol engine and electric motor, are fuel-efficient and have lower emission levels, making them environment-friendly.

Toyota's domestic arm, which does not have the required manufacturing infrastructure to roll out hybrid cars, is unsure of the initial volumes and feels that the Indian market is not yet ready for such cars.

A joint venture between Toyota and Kirloskar Motors, namely Toyota Kirloskar, was planning to import Prius as a CBU(completely-built-up units). Toyota Kirloskar expects strong demand for these cars due to their superior technology, low emissions and fuel efficiency but high import duty of 114% seems to be a major hindrance.

However, Toyota Kirloskar will continue to evaluate the situation for hybrid cars, but the current focus would be to bring in the SUV Fortuner by the middle of 2009 and the all-new compact car by 2010. The Japanese auto major is increasing its investment to Rs 3,200 crore for setting up its second plant in Bangalore.