A new hybrid battle has begun in the U.S., with a redesigned Toyota Prius and the all-new Honda Insight and Ford Fusion hybrids reaching dealerships this spring. The three are competing for a shrinking pool of buyers, as hybrid sales have trailed off. The hybrid throwdown, then, may turn into a price war as well. Overseas, it already has.

Autoblog reports, "With arch-rival Honda having priced its new Insight hybrid lower than the current Prius, Toyota is responding in kind by dropping its domestic market sticker price on the upcoming new Prius to match."

AutoSpies explains, "The Honda Insight has met with resounding success in terms of sales in Japan with its 1.89 million Yen ($19,027) introductory price," while the Prius, when well equipped, can push close to $30,000.

Earlier reports had suggested Toyota would continue selling the 2009 Prius alongside the much-improved 2010 model, with the older version marketed as a budget vehicle and an alternative to the Insight. The company may still do that. Autoblog reports, "In a double-pronged attack, Toyota intends to keep the outgoing Prius on the Japanese market at a significantly reduced price of 1.89 million yen ($19,130)." That means that buyers could purchase the 2009 Prius for roughly the same price as a base-model Insight, or the improved 2010 for a price similar to that of a higher trim-level Insight.

The Japanese market prices may predict prices here in the U.S. Automotive News reports, "Bringing the starting price down to Insight levels will steal Honda's thunder as purveyor of world's first affordable hybrid vehicle. Toyota's pricing strategy for the Prius in the United States is still unclear. But if Japan is any guide, it will be very aggressive."

If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.