If Honda’s pricing strategy for introducing the Honda Fit Hybrid in Japan is any indication, then the compact gas-electric car soon will be America’s most affordable hybrid.
The Tokyo Shimbun and Mainichi Shimbun newspapers this week reported that Honda plans to sell the Fit Hybrid for about $18,600. That’s approximately $3,500 less than the Honda Insight, currently the cheapest hybrid, and about $4,600 more than the gas-powered Fit. Pricing for the Japanese market does not move in sync with U.S. pricing—but a similar strategy in the U.S. would put the base MSRP around $17,000. The Honda Fit Hybrid is expected in 2011. Honda will launch the Fit Hybrid at the Paris Auto Show this fall.
Japanese subsidies for fuel-efficient cars have helped make the Toyota Prius the top-selling car for the past 15 months. Some of the subsidies are scheduled to end next month, a move forcing hybrid makers to more aggressively compete on price.
In the U.S., the cost premium for hybrids has been a critical obstacle for moving hybrids into the mainstream. Hybrids represent approximately 2.5 percent of the new car market. Honda attempted to market the redesigned Honda Insight hybrid as an affordable “hybrid for the masses,” but the Prius-look-alike is only slightly cheaper than the Prius, while offering less room and lower mpg. The Honda CR-Z hybrid coupe, which goes on sale this fall, similarly falls short on its promise to combine fuel economy and sportiness at a competitive price.
Perhaps the Honda Fit Hybrid, if offered around $17,000 with fuel economy in the mid-40-mpg range, could be the right formula. The Honda Fit, sold as the Jazz in other market, is consistently praised for offering “loads” of passenger and cargo room in a small package. See the video below for how Honda Australia used humor to advertise the Fit’s impressive interior space.