Honda looks to expand hybrid market through venture with GS Yuasa

FUKUCHIYAMA, Apr 21, 2009 (Kyodo News International - McClatchy-Tribune Information Services via COMTEX) -- YUSBF Quote Chart News PowerRating -- Honda Motor Co. and GS Yuasa Corp. on Tuesday marked the start of construction of their joint venture plant in Kyoto Prefecture to produce lithium ion batteries for hybrid cars, which many see as the key to enabling them to ride out the deep slump in the global auto industry.

Honda President Takeo Fukui indicated that the automaker plans to install the next-generation batteries that will be produced by the joint venture firm, Blue Energy Co., in its Civic or Fit hybrid model anticipated after 2010.

"We're going to take on the challenge of producing lithium ion batteries that will exceed nickel metal hydride batteries in performance and cost potential," Fukui said. "In order to strengthen our lineup, it's important to achieve further progress in hybrid technology." Fukui spoke to reporters following a groundbreaking ceremony in Fukuchiyama, where the plant will be built to make lithium ion batteries for gasoline-electric hybrids, a core component many experts believe will dominate the market for fuel-efficient cars.

Blue Energy plans to begin operations by autumn 2010 and is expected to have a battery production capacity that will be enough to make about 200,000 to 300,000 hybrids per year. The firm is capitalized at 15 billion yen and is owned 51 percent by GS Yuasa and 49 percent by Honda.

"The most attractive point for us is that we will be able to build next-generation eco-cars with the world's best automaker," GS Yuasa President Makoto Yoda said at a joint press conference with Honda's Fukui.

Despite being a front-runner in hybrid technology, Honda has been the last among Japan's top three automakers to find a specific partner to build its own lithium ion batteries.

The batteries are more compact, lightweight and powerful than nickel metal hydride batteries, which are mostly used in current hybrid models including Toyota Motor Corp.'s Prius and Honda's Insight.

Toyota formed a separate battery venture with Matsushita Electric Industrial Co., now Panasonic Corp., in 1996 while Nissan Motor Co. partnered with NEC Corp. in 2007.
Toyota plans to market a lithium ion battery-powered plug-in hybrid by the end of 2009, while Nissan has said it will launch an electric vehicle and a lithium ion-powered hybrid in 2010.
Meanwhile, Honda's current mega-hit Insight hybrid hatchback is powered by nickel metal hydride batteries developed by Sanyo Electric Co., a partnership many analysts believe will come under strain following its planned merger with Panasonic.

But Fukui expressed confidence that Honda's annual production level of all of its hybrid models will soon reach 400,000-500,000 units even as overall demand for vehicles sink under the weight of the global economic recession.

He added that Honda has received orders for more than 25,000 units of the Insight hybrid in just two months since its debut in early February, winning fans with its low retail price of 1.89 million yen.

Fukui said Honda's CR-Z sports car hybrid to be launched next year will not be powered with lithium ion batteries, but suggested the automaker may be ready to install the batteries in the hybrid version of the Fit compact or the second-generation Civic hybrid that will be launched at an undetermined date after 2010.

GS Yuasa, a Kyoto-based battery maker, also has a separate joint venture with Mitsubishi Motors Corp. and Mitsubishi Corp. to develop lithium ion batteries, which will be used to power Mitsubishi's zero-emission electric vehicle to be launched in the summer.

Source;
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