Honda Aims for Most Affordable, Most Efficient Hybrid

Oct. 25, 2007: Source – Bloomberg

Honda CR-Z Hybrid Concept

Honda recently unveiled its CR-Z concept compact hybrid sports car. But the lion’s share of growth in Honda’s hybrid sales is expected to come from a new, more practical, efficient and affordable hybrid sedan.

Honda reported this week that it plans to expand its hybrid sales dramatically in the near future. Honda President Takeo Fukui predicted just three years from now, hybrids will account for 10 percent of Honda’s global sales volume. Fukui explained that an expansion in Honda’s hybrid lineup would fuel the sales growth. Honda currently offers just one hybrid model—the Civic Hybrid—but will add a second model by the end of 2009. The new hybrid, rumored to be based on the Fit/Jazz platform, will be a hybrid-only car that seats five passengers—and could become both the most efficient and most affordable hybrid. Speaking at the Tokyo International Auto Show, Fukui also announced plans for a compact hybrid sports car, based on the CR-Z concept.

It remains to be seen whether Honda can really attain such ambitious sales goals. Last year, just 2.8 percent of Honda vehicles in the U.S. were hybrids, and penetration in markets overseas was far lower. Offering a distinctive, hybrid-only model (as Toyota has done with the Prius) may boost sales, although only if the new Honda hybrid provides something that its competitors do not. Launching in late 2009 is particularly risky: by then, Toyota is likely to have an updated Prius with freshened styling, higher fuel economy, and better performance. Sales of an updated Prius could easily erode Honda’s sales target, which is set at roughly 200,000 units for the new hybrid-only model.

If Honda’s new hybrid has a secret sauce, it may be cost. Fukui revealed that Honda was working hard to lower the production costs of hybrid drivetrains. He confessed that the current Civic Hybrid was “pretty much hand-made” and acknowledged that Civic Hybrid sales were not profitable for the company. But a lower-cost hybrid powertrain could change that, making Honda more willing to produce larger volumes of hybrid cars, and making hybrids more affordable for consumers.

Fukui cited a target hybrid premium of $1,750 but did not say whether Honda had already reached this goal. If it has, the upcoming hybrid-only Honda model could combine high fuel economy with very low cost. The current ,a href=”http://www.hybridcars.com/vehicle/honda-fit.html”>Fit, for example, starts at about $14,000, so presumably a hybrid model would cost just $15,750. A hybrid at that price could attract new buyers into the hybrid marketplace, including younger buyers who are interested in hybrid technology but are not willing to spend more than $20,000 for a Prius, Civic Hybrid or a hybrid SUV.

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  • ddb

    Hooray for the world I guess…. But what I want is a Hybrid CRV type SUV.
    We live in Colorado and drive into the mountains often and back to the midwest regularly. We love the CRV in general but would, in a heartbeat, buy a CRV type vehicle that could obtain mileage in the mid 30′s. Is this asking way too much? Come on Honda, step up….

    ddb

  • Luffy

    I recently bought a 07 civic Hybrid and love it. Just wish they would make a higher mileage hybrid car ^_^

  • cc

    this is a beautiful hybrid. they’re finally getting some style!
    as to anyone who wants a hybrid suv. that defeats the purpose…

  • ohbuck9

    I don’t understand how having Hybrid SUVs defeat the purpose. An increase in fuel efficiency in trucks and SUVs will lessen our use of oil then an increase in fuel efficiency in cars.

    Think about it. A 15 mpg SUV increases 5 mpg to 20 mpg. This is a 33% increase in efficiency. A car that gets 40 mpg increasing to 50 mpg, a 10 mpg increase, only increases efficiency by 25%.

    I understand what you mean is people shouldn’t drive SUVs. The problem is they do and will continue to. I’m not sure what it is like where you live, but I see more trucks and SUVs on a regular day than cars.

  • ddb

    But I wonder what the purpose of denigrating the desire for a vehicle that is a “hybrid” serves? What is at cross purposes to want a small practical vehicle that jumps in mileage from 24 to , say, 36 mpg? In my world, “beautiful” hybrids take a back seat to purpose and function.

    ddb

  • Max Reid

    This car is a coupe, so should be bit cheaper,
    With a hatch, it should offer more cargo space (like Prius)
    Their Hybrid system is partial and can be lot cheaper.
    Latest model Fit with CVT gives 56 MPG.

    If they apply that sort of transmission and a light weight vehicle, they can sell the car for $16,000 with around 50 MPG

    and Honda can sell 200,000 units.

    Infact Honda can apply the Hybrid system in LX model Civic and sell it for $18,000 instead of being in EX model alone which costs $21,000.

    But a bold challenge to the Prius-2009 which may be a plugin.

  • Special K!

    You must show me this 56 MPG Honda Fit you speak of… I will happily take mine back to Honda since mine apparently is defective.

    Everybody else, please keep the arguments and stupid comments to yourself, keep comments relative.

    Now, because of the good looks of this car, Honda will most likely go for performance hybrid. Do some research onto the Mitsubishi Eclipse Concept E and you’ll see there are amazing sports car benefits to a hybrid powertrain. Ever since I saw this concept I’ve decided without a doubt I am buying one no matter the cost.

  • domboy

    I have heard many times that Honda is more interested in clean diesel powertrains for their larger models, and leave hybrid tech to smaller models. So we’re more likely to see a diesel CRV than a hybrid CRV in the US (if we see either). I believe Honda sells a diesel CRV in Europe (of course), so perhaps well get something similar. Then again, anything can change.

  • Jesse

    Reading the article im being to be very optimistic at the cost of s hybrid. Im a student and would love to have a car to go to and from school. And like all college students, im broke as dirt. A hybrid under $20,000 would be fantastic! Honda make a hybrid under 20 grand, and you have a new buyer on the rocks.

  • Max Reid

    Mr Special K

    Good looks are not reserved for performance car alone. Honda brought the Performance Accord Hybrid with V6 engine and got a beating.

    In 3 years, they sold under 25,000 units and closed the model.

    With rising gas prices and oil crossing $93/barrel already, I bet its going to be a car which will cross 55 MPG threshold.

  • Jeff

    ddb and cc,

    ddb, a few extra miles per gallon on an SUV do add up when multiplied by all the other SUV’s and pickups on the road. But cruddy gas mileage is still cruddy gas mileage even if it is a bit better.

    cc,
    If you’re going to get on your high horse about gas consumption then I hope you do not own a car since they are about the least efficient form of transportation. Work from home or move within walking/biking distance from your office. Then you can jump on folks who think driving an SUV with less cruddy mileage is a great thing.

    I have no room to talk as I do own a 4×4 pickup to pull our boat and horse trailer along with a Prius and a Matrix. But I have two children who need to have a quality planet to live on and I fully intend to stop driving as soon as possible.

  • Morat

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  • aneshia whitney

    that car is blinging