Just as they were launching the new B-segment Yaris hybrid in Europe came news Toyota executives were delighted to highlight; the Prius line, launched initially only in Japan 15 years ago, was the world’s third best-selling car line in the first quarter as US demand and incentives in Japan turned it into a mainstream hit.

Prius sales more than doubled as Toyota extended the name to a four-model 'family' of vehicles at the same time that rebates and tax breaks in Japan are saving buyers the equivalent of US$2,500 or more. In the quarter, sales soared to 247,230, trailing only Toyota’s Corolla, at 300,800, and Ford’s 277,000 Focus sales, Bloomberg News reported.

Ironically, Toyota Europe is foregoing one of the extended Prius family - the more compact C - in favour if the Yaris but is offering the new 'plus' seven seater, called V in some markets, and the plug-in hatchback alongside the well established hatchback that has been the mainstay of two out of three generations exported since 2000.

Some Prius taxis in the UK have done 300,000 or 400,000 miles without major mechanical mishaps so the nameplate has a strong reputation for reliability.

The Prius surge, after two years of recalls and production disruptions, also propelled Toyota back into the global sales lead for the first three months of the year, Bloomberg noted, as well as three of the top 10 models in the US so far this year, including the midsize Camry.

“It proves Prius wasn’t a fluke, that there’s a long-term market for hybrids,” Eric Noble, president of the Car Lab, an automotive consultancy in Orange, California, told the news agency.

In the aftermath of last year’s earthquake and tsunami that cut parts and auto production for Japanese carmakers, the Japanese government in December began encouraging purchases of fuel- efficient cars to reverse sagging domestic deliveries.

Rebates of as much as JPY100,000 (US$1,258) are available from a JPY300bn fund for qualified cars, including the Prius hatchback, wagon, plug-in and Aqua subcompact, sold in the US and elsewhere as the Prius C. Tax savings further reduce the purchase price by another JPY100,000 or more. The average price for a Prius in Japan is about JPY2.5m and around $25,000 in the US.

Bloomberg noted the Aqua has become the car of the moment in Japan, helping more than triple Prius family sales in the country to 175,080 in the first quarter, from 52,507 last year. While funds for the rebates may run out in July if the government doesn’t extend them, the tax reductions continue through 2015.

“It was good that introduction of Aqua and the start of government subsidies happened almost at the same time,” Koichi Sugimoto, senior analyst at BNP Paribas in Tokyo, told Bloomberg. He added that there was more to the success than the government incentives. “Toyota is introducing good vehicles and assuming it will maintain a certain volume even after the subsidies end,” he said.

Toyota ranked as the world’s largest automaker by sales from 2008 to 2010 before the natural disasters pared its global production and deliveries.

Sales of Toyota, Lexus, Scion, Hino and Daihatsu vehicles grew 18% to 2.49m in the quarter, Toyota said in a US regulatory filing this month. That put it ahead of GM’s 2.28m and VW’s 2.16m, according to data compiled by Bloomberg.

CEO Akio Toyoda has said the company founded by his grandfather is “turning the corner” after a couple of difficult years. The company endured record recalls in 2010 in the US, its biggest single market, for floor mat and accelerator pedal flaws that caused unintended acceleration.

“You are seeing a company that is clearly coming back,” Efraim Levy, equity analyst with Standard & Poor’s Capital IQ in New York, told Bloomberg. “For Prius to sell in that kind of volume, something that’s been a niche product, it’s an achievement.”

Since the start of Prius sales in Japan in 1997, Toyota has sold 4m hybrid electric vehicles worldwide, including 1.5m in the US, the company said earlier in May. The tally included 400,000 in Europe, local officials said this week.

In the US, typically Toyota’s top market for Prius, sales jumped 42% in the first quarter, and 56% to the end of April to a record 86,027, Bloomberg said. US sales of the model since its 2000 introduction, including the new variations, total 1.18m vehicles, according to data compiled by Bloomberg. Global sales increased 125%.

The sales pace for Prius isn’t likely to be matched soon by any other hybrid models, John Wolkonowicz, an independent analyst in Boston who specialises in automotive history, told the news agency.

“It’s the phenomenon we saw with Chrysler and minivans: It brought out the first minivan and after all these years, Chrysler still is minivan sales leader,” he said. “Prius was the first hybrid on the block.”

Petrol prices in the US averaged $3.68 a gallon on 22 May, down 6.6% from $3.94 on 5 April. A continued price decline doesn’t favour hybrid sales, said Wolkonowicz.

“You’re going to see hybrid sales drop again in US as gas prices fall,” he said. “Hybrid sales won’t truly take off in the US until we get to $5 gas and it stays.”