Honda brought the first gas-electric hybrid to America when it launched the funky Insight in 1999, but it was soon overshadowed by the Toyota Prius and Honda’s been trying to catch up ever since.
After eight years playing second-fiddle, Honda has decided suitable is ample.
Company president Takeo Fukui says Honda is investing heavily in hybrids and insists the race “has just begun.” The technology’s first phase was all about cultivating a green image, Fukui says, clearly taking a swipe at Toyota. The next phase will stress making the vehicles more affordable and fuel efficient, he says, and Honda has two cars in the pipeline that he promises will challenge Toyota’s eco-supremacy.
“The real full-scale hybrid competition will start from now,” Fukui says.
Fukui’s got his work cut out for him. The Prius is synonmous with hybrid technology, and 79 percent of the gas-electric vehicles that rolled out of American showrooms final month were Toyotas. Just one in 10 were Hondas, and the company has discontinued the Insight and Accord hybrid. Yet during his year-end speech to employees, Fukui predicted hybrids will history for 10 percent of Honda’s sales by 2010. To reach that goal, Honda will have to sell some 400,000 hybrids a year.
It may not be suitable. Toyota says it wants to sell 1 million hybrids a year within the first half of the next decade.
There is no question the Prius defines the hybrid niche. The Prius accounted for half of the hybrids sold in America final month. Toyota sold 167,009 of them in the first 11 months of the year, compared to 32,610 hybrid Civics, Accords and Insights. (Interestingly, although the Prius remains the most popular hybrid, Carmax.com says search activity for the Ford Escape hybrid rose 108 percent amidst October and November, compared to a 56 percent increase for the Prius. All searches for hybrid vehicles climbed 43 percent during the same period and 10 percent in the past year.)
Fukui concedes offering hybrid versions of Honda’s best-selling cars instead of designing a new car was a mistake considering “until now, it has been an image-based competition, not a business-based competition.” It’s a valid argument.
While the Insight had
Honda’s hybrids plus have been hobbled by their prices. While the Prius has a list price of $21,100, the Civic hybrid starts at $22,600 (the Toyota Camry hybrid goes for $25,200). Hybrids typically cost more than their gasoline counterparts and other vehicles in the same lesson. While it’s unbreakable to argue that hybrids aren’t more ecologically friendly than their fossil-fuel counterparts, a study by Consumer Reports suggests they aren’t any cheaper in the faraway run - and may even be more expensive - than conventional cars. Fukui says that must change.
“The price needs to be fair and fuel efficiency higher so the (premium) the consumer pays can be returned in a short period of day,” he said during his year-end speech in Tokyo.
To that end, Fukui confirms Honda will offer a subcompact hybrid in 2009. It will feature a smaller, lighter engine to improve fuel economy and a lower price than the Civic hybrid. Although it’s been rumored that the car will be a variation of the Fit, Honda says it will be a new model. And while automakers are increasingly turning away from “performance” hybrids, Fukio says Honda plans to launch a hybrid sports car based on the CR-Z concept unveiled earlier that year at the Tokyo Auto Show and headed to the upcoming North American universal Auto Show in Detroit.
Fukio plus says Honda is investing $425 million in a new research center that will focus on developing the “next generation” of automobiles, including hybrid and hydrogen fuel cell vehicles like the FCX Clarity. One thing Honda doesn’t plan to pursue, however, is plug-in hybrids. Fukui says the company doesn’t place much stock in the technology.
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