Honda Announces Hybrid Fit

By Brendan Moore

05.21.2008

It looks like Honda will be the first to market with a subcompact hybrid. At a press conference in Tokyo this morning, Honda announced that they will produce a hybrid version of their popular Fit (Jazz in the rest of the world) hatchback. The plan is to offer the hybrid option at no more than $2000 USD on the third-generation Fit.

“The Fit has great fuel efficiency to begin with, and if you put in a hybrid, it’s going to get even better,” Honda Motor Co. president Takeo Fukui said while announcing the car at a mid-year news conference. “So with crude oil prices going up this much, I think a Fit hybrid is now starting to make sense.”

Since the second-generation Fit will not show up here until late 2008 calendar year as a 2009 model, and the third-generation platform is not expected to show up until a few years later, that leaves more than enough time to reach that (additional) $2000 price point for the hybrid. The Fit Hybrid is probably due for an appearance in 2015.

The Fit already gets excellent fuel economy and a hybrid version should be good for at least another 20 mpg over the 28/34 average mpg of the current model. Since the Fit starts at an MSRP of $13,950 USD, another $2000 gets you a great car with great fuel economy for well under $18,000. It’s too bad for Honda that they don’t have it to sell right now; they could sell a few million over the next several years easily.

In other news from the same press conference, Honda Motor Co. said they will retail a brand-new, improved and affordable gas-electric hybrid in the U.S., Japan and Europe starting in early 2009. This new hybrid signals a shift for Honda, who until very recently did not seem interested in matching Toyota in terms of hybrid offerings.

The company’s president, Takeo Fukui, told journalists that “green” cars, especially hybrids, are going to be a focus of Honda’s market strategy for the next three years, starting this fiscal year that began April 1. “Hybrids have drawn attention for their image, but time has come to go to the next step,” he said, noting that Honda was serious about selling hybrids in large numbers and at mass-market prices.

Fukui did not allow as to what the price of this new vehicle for 2009 might be. But he did say the new hybrid will be a five-door hatchback seating five passengers, and it will showcase new Honda technology that reduces the size and weight of the hybrid system in order to reduce overall vehicle weight, resulting in increased fuel efficiency. But it won’t have next generation lithium-ion batteries. Fukui said lithium-ion technology still hasn’t overcome safety and cost hurdles.

Fukui said that Honda plans to sell 500,000 hybrids per year sometime after 2010. Toyota, by contrast, is targeting annual hybrid sales of 1 million vehicles in the early 2010s, led by the Prius, which has completely dominated the hybrid Civic in the marketplace, making it look like a pipsqueak in terms of sales.

To expand hybrid sales, Honda will introduce a new sporty hybrid based on the CR-Z model, a Civic hybrid and the previously-mentioned hybrid model of the Fit subcompact, in addition to the new hybrid going on sale next year, Fukui said.

Honda, Japan’s No.2 automaker, states that it expects to sell more than 4.5 million cars and 18 million motorcycles worldwide in 2010. Last year, it sold 3.767 million cars and 13.48 million motorcycles. Unlike other automakers that sell in the U.S., Honda’s sales have not been dragged down by the big drop in U.S. new-vehicle sales.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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5 Comments

  1. The Honda CEO just bet his job on hybrids

  2. 2015 is a long ways away. I don’t see how you can justify saying that Honda will be the first to market with a hybrid sub-compact. That is seven years from now and I can’t believe that some other company will not make a sub-compact car between now and then.

  3. Somebody needs to tell GM about those lithium ion batteries. Apparently they haven’t heard about those problems because they’re going full speed ahead with the Volt and it’s li-ion batteries.

  4. Honda’s stolen a march on “green” PR with this one. I saw one of the dumbest articles I’ve ever read on CNN Money yesterday, in which “analysts” fawn all over Honda and poo-poo all over the Detroit 3 for not being all hybrid-y.

    I’d like to apply what “i doubt that” said to that article. In fact, I’d like to cut and paste that paragraph 1000x and spam CNN’s email servers with it.

    You have to remember, Honda’s last big engineering intiative was safety, and that yielded an awesome crash-test facility, the ACE composite-steel body structure, etc. It also yielded the largest-ever Civic and an egregiously overstuffed Accord, the latter of which is probably the worst offense. So they’re essentially saying that the next big push will be efficiency. It would be an understatement to say that that’s a rather timely initiative.

    Efficiency is something they kinda already have in the bag at Honda, which has the most-efficient vehicle fleet in the known universe, or something like that.
    So the next challenges are cutting out some more weight, improving the aero, and using electric motors to make up for the rest.

    I know the hybrid Fit stole all the headlines but I think the one that should be creasing Toyota’s shorts right now is the dedicated hybrid coming out for ’09, the Prius-fighter. I’m willing to bet it’ll just be an FCX Clarity without all the hydrogen tomfoolery, which is what I think a lot of people would rather end up with as their next Accord.

  5. Honda sales didn’t plummed but the Acura division, the situation is different. Some said customers wait for the next-gen TSX, TL while others think than Infiniti had stolen a bit of Acura’s steam (as well as Cadillac resurgence)

    Also, Honda profits dropped from 80% http://www.financialpost.com/story.html?id=471620 in the 1st quarter with the current economy context and also, the current value of the yen against the US dollar played a role as wellé

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