RENEE MONTAGNE, host:

When you think of a hybrid car, the Prius may come to mind. But Toyota's flagship green car is facing stiff competition from other automakers launching their own hybrids. Now Toyota is responding by making the Prius a stand-alone brand.

Michigan Radio's Tracy Samilton reports.

TRACY SAMILTON: Go ahead and roll out all the stereotypes about Prius owners. Lauren Squires, a resident of the college town of Ann Arbor, Michigan, has heard them all, and she's not a bit defensive about it.

Ms. LAUREN SQUIRES: I don't own Birkenstocks anymore. No. I used to. I don't have any currently.

(Soundbite of laughter)

Ms. SQUIRES: I do make my own granola.

(Soundbite of laughter)

SAMILTON: Squires bought her Prius in 2007. That year, Toyota sold more than 181,000 Prius cars here. Car sales of all kinds have dropped since then, but Toyota is still the undisputed king of the hybrid. In fact, the Prius accounts for more than half of all the hybrid cars sold here. Squires says her Prius suits her lifestyle just fine, most of the time.

Ms. SQUIRES: The only thing that sometimes, I'm lacking on space is if I can't fit my bike inside, which I could fit inside some vehicles.

SAMILTON: More space. That's what Americans always seem to crave in their cars.

Toyota's Kirk Forscht says the five-passenger Prius v will appeal to people who've always wanted a Prius, but figured it was just too small.

Mr. KIRK FORSCHT (Toyota): They've got two kids, a dog, and all the things that come with that, all the strollers and baggage and bags, and it's a little tight. So the Prius v gives them an option, with all this extra cargo space, to be able to get all the things they need and still drive a green vehicle.

SAMILTON: But the Prius is no longer the only green vehicle. Ford, Honda and GM all sell hybrids, too. So far, Prius has been to hybrid as Kleenex is to tissue, or Levi's is to jeans. That kind of customer recognition sells cars and elevates a company's image.

Toyota's Ed La Rocque says the Prius v could boost overall Prius sales by another 15 to 20 percent.

Mr. ED LA ROCQUE (Toyota): Ninety-seven percent of all Prius that we've sold since we launched in 2000 are still on the road today. So, you know, that tells us that they're reliable, customers have accepted them and, you know, we think the future's bright for all hybrids.

SAMILTON: But don't forget, hybrids cost more, and demand has always been closely linked to gas prices. La Rocque acknowledges as much, but says even in the short run, he's not worried.

Mr. LA ROCQUE: You know, we don't expect gas prices will go down below $3.50 a gallon any time soon.

SAMILTON: Expanding Prius is also part of Toyota's plan for stricter CAFE standards. It will be difficult for car companies to meet those mandates without selling more hybrid cars.

While La Rocque says the Prius has made Americans comfortable with hybrids, Bill Visnick, an analyst with Edmunds Auto Observer.com, isn't so sure.

Mr. BILL VISNICK (Analyst, Edmunds Auto Observer.com): I'm surprised at how many people still think hybrid cars, you know, need to get plugged in, you know, that you have to plug them in. It's really quite surprising to me that after 11 years in the market, how many people still don't really understand how hybrids work.

SAMILTON: And Visnick says there's another problem with the Prius. As popular as it's been...

Mr. VISNICK: And the fact is that it's very much known as a weeny sort of a car, you know, and sort of a car for people who, you know, are driving too slow in the fast lane.

SAMILTON: Visnick says the first company that figures out how to make a hybrid car sexy and cool will gain a competitive edge. So far, that hasn't been Toyota. But he says Prius is still the standard bearer. It's always going to represent the bar. Toyota's supplier problems will slightly delay the launch of the Prius v. It's now due here in late fall. Toyota will add two other members to the Prius brand next year. To add to the confusion, one of them will be the kind of hybrid you have to plug in.

For NPR News, I'm Tracy Samilton, in Ann Arbor.

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