Honda throws down green car gauntlet

Honda Motor is stepping up its “green car” challenge to Toyota, adding two petrol-electric hybrid vehicles to its line-up next year, including a hybrid version of its top-selling Fit sub-compact.

Takanobu Ito, Honda’s chief executive, said the Japanese carmaker was also developing a more powerful hybrid drive for larger vehicles that will use two electric motors alongside its petrol engine, the same configuration used in Toyota’s dominant Prius hybrid.

Honda has emerged this year as Toyota’s most serious rival in low-emission vehicles. Its Insight hybrid, revived after a three-year production hiatus, has been a hit, particularly in Japan, where it was briefly the best-selling full-sized car before being eclipsed by the newest version of the Prius.

Honda’s decision to launch a hybrid version of the Fit extends its strategy of competing primarily on price.

The car, which is called the Jazz in Europe and some other regions, will use the Insight’s single-motor hybrid drive, which is cheaper to build but less powerful or fuel-efficient than Toyota’s two-motor system.

The Fit is likely to be the most affordable hybrid yet, a distinction now held by the Y1.89m ($20,400) Insight. Mr Ito said Honda would begin selling the car in Japan by the end of next year, but did not give a timetable for an international roll-out.

Honda’s other planned hybrid offering, the small CR-Z concept sports car, is to go on sale domestically in February and will also use the single-motor drive.

Honda is hoping to increase hybrid sales to 500,000 hybrid cars a year early in the next decade, equivalent to 15 per cent of its current sales volume.

“We want to transfer the Insight’s affordable hybrid technology to other models as quickly as possible,” said Mr Ito, who took over as Honda chief executive last month.

Toyota plans to launch four new hybrids in Japan and three overseas next March, and has said it wants to offer hybrid versions of all its cars by 2020.

Honda has also been working on “clean diesel” systems and has built a prototype hydrogen fuel-cell car, the FCX Clarity, which it began leasing to a handful of customers in California last year.
Mr Ito suggested Honda was now more firmly focused on hybrids, saying it was “struggling” to make heavy diesel engines cheaply and that the infrastructure needed to process and distribute hydrogen “isn’t moving forward”.

He said he wanted to turn Honda, whose earnings have held up better than most carmakers’ during the slump, into an even leaner and more flexible operation. Honda will use more locally made parts in cars it sells in China, India and other emerging markets, he said, in order to keep costs down and compete with local rivals, and will reduce the number of domestic-only models it sells in Japan.

Source;
http://www.ft.com/cms/s/0/42f0aa7a-6f99-11de-bfc5-00144feabdc0.html