According to analysts, the US hybrid market seems to be driven more by economic conditions rather than concern for the environment as fluctuations in the sales of hybrid vehicles suggest. They point to the fact that sales of hybrid vehicles are known to fall sharply when the economy is in a bad shape, but surge when economic fears take a back seat.

Perhaps not surprisingly therefore, the first casualty of the recent economic downturn was the Toyota plant in Mississipi that was forced to shut down as sales of hybrid Priuses plummeted sharply.

At the same time in Japan, a hybrid, the Honda Insight became the best selling car in April.

It is in this context and the fact that the Toyota Prius is already a well established car in North America, that makes the launch of the new Prius 2010 an interesting gambit for the Japanese auto major, which is launching an aggressive campaign for the 2010 model that will be on sale by end May.

"The Prius has evolved with our customers over the past 10 years and is now more things to more people," said Bob Carter, group vice president and general manager, Toyota Division. "We believe that its new features will appeal to returning owners, while at the same time attract buyers who are looking for innovative technology with a hybrid powertrain."

The new 2010 hybrid car delivers a fuel economy of 51 miles per gallon in city traffic and 48 miles per gallon on the highway. It comes in five trim levels at a base price of $22,750, including a destination charge, so low that it can hardly leave much of a profit margin for Toyota. A lower priced version will be available for $21,000 later this year and top trim level will cost $28,020.

To enhance Prius' appeal, Toyota has added several features and high-tech options to the new Prius. It is roomier and comes with four driving modes, steering wheel touch controls the display on the instrument panel, a monoroof with solar panels and an Intelligent Parking Assist system that signals a danger of a likely hit while steering the vehicle to a parking slot.

The new Prius is powered by Toyota's Hybrid Synergy Drive that allows the car to certified as an Advanced Technology Partial Zero Emissions Vehicle, releasing over 70 per cent lesser smog-forming emissions than the average new vehicle.

It comes with a 1.8-liter Atkinson-cycle, four cylinder engine that produces 98 horse power at 5,200 rpm. Together with its electric motor, its hybrid system will generate a combined net horsepower of 134, an increase of 24 horsepower over its last generation hybrids.

Vehicle Stability Control, Traction Control Systems, Anti-lock Brake System with Electronic Brake Force Distribution and Brake Assist comprise some of the salient safety features incorporated in the vehicle in a addition to the standard electric power steering and four-wheel disc brakes.

The new Prius will take on other hybrids such as the Chevrolet Malibu Hybrid, the Nissan Altima Hybrid but according to industry sources the year's top competitor will be Honda Insight.

Meanwhile, the auto maker has denied a report that it is considering offering its hybrid vehicle technology to General Motors.