If the Volt is priced at $30K++...
Detroit lags Honda in hybrid race
DETROIT (AP) -- Honda Motor Co. is coming out with hybrid cars, starting
early next year, that will cost about $1,900 more than comparable
gas-only models. The cost for the Detroit Three, according to industry
analysts, could be lower market share as U.S. consumers continue their
rapid shift to smaller, more fuel-efficient vehicles.
Analysts say the new hybrids, including a gas-electric hybrid-only model
to fight the popular Toyota Prius and a hybrid version of the subcompact
Fit, will hit the market at the right time, with gasoline prices
continuing to rise.
"It's a game-changer for the short term if they can get the products in
the marketplace in the next couple of years before the domestics can
come up with a significant volume of products that get high mileage,"
said Jesse Toprak, chief industry analyst for the auto information site
Honda, which already has the most fuel-efficient lineup in the United
States, announced Wednesday that it will sell the new hybrid-only car in
the U.S., Japan and Europe starting in early 2009. It has not determined
yet where the Fit will be sold.
The new models are a key part of Honda's strategy for the next 3 years
that President Takeo Fukui outlined at Honda's Tokyo headquarters.
The plan also included production innovations and expansion in Japan to
cut costs, so Honda can stay competitive amid soaring material and
energy costs, he said.
In addition to the new model and the Fit, Honda will introduce several
other hybrids: a Civic and a new sporty model based on the CR-Z, Fukui said.
Fukui refused to give the price for the new hybrid-only vehicle.
But he said the difference between hybrids and their comparable standard
models should be kept within $1,900, although such price gaps can now
reach as much as $4,800.
"The 200,000 yen [$1,900] difference is a must," Fukui said.
Hybrids deliver a cleaner, more efficient ride by switching between a
gas engine and an electric motor at different speeds, and by recycling
the energy the car produces as it moves.
Honda's hybrids compound a problem that Ford Motor Co (F, Fortune 500).,
General Motors Corp (GM, Fortune 500). and Chrysler LLC already are
scrambling to overcome: the U.S. market shift to small cars. The
American automakers are known for making trucks and sport utility vehicles.
"It does put them a little bit on their back foot in the sense that
small cars have not been a core market for them," said Michael Robinet,
vice president of global forecast services for CSM Worldwide, an auto
industry consulting company based in Northville, Mich.
GM and Ford, Robinet said, can rely on their European and Asian
operations for small-car expertise to quickly catch up. Chrysler has few
small vehicles of its own but has signed a deal for Nissan Motor Co.
(NSANY) to make small Chrysler cars in 2010.
Honda's hybrids come as all automakers are rushing to make their models
more fuel-efficient. GM largely has focused on hybrids in its larger
vehicles and on the Chevrolet Volt, a plug-in electric car it hopes to
bring to market in 2010. Ford is banking on its Ecoboost
direct-injection turbocharged engines and has midsize hybrids due out
next year, while Chrysler is developing efficient smaller diesels and
has hybrids in some large SUVs.
"They've done a lot of navel-gazing, saying, 'What are we good at?'"
Robinet said. "They've all basically said we're all good at something
different. GM and Toyota have the resources to invest in every
technology, but others have to invest in some and do joint ventures for
No one really knows what technology will catch on with consumers,
"Everybody's nervous about missing the ship that leaves the dock
quickest, whether it's ethanol, battery technology," Robinet said. "But
it's difficult to say, 'Are they missing it?' because everybody's going
down a different route."
As recently as last year, people buying hybrids did so to make a
statement about their concern for the environment, but that has changed
and Honda is ready to capitalize on it, Toprak said.
"Now we're after mass market, and mass market is more aware of the
hybrids than ever due to high gas prices," he said.
Honda did not disclose the name for its new hybrid but said it will be a
5-door sedan seating 5 passengers. It will feature new technology that
reduces the size and weight of the hybrid system to increase fuel
efficiency, according to Honda, Japan's 2nd-biggest automaker.
Although Honda already has developed hybrids, it has fallen behind
Japanese rival Toyota Motor Corp. (TM) in this segment.
Last year, Honda discontinued the gas-and-electric version of its Accord
sedan - sold only in North America - which sold just 25,000 units since
going on sale in 2004. In 2006, it pulled the plug on the slow-selling
2-seat Insight hybrid.
Honda (HMC) said it's also pushing its fuel-cell technology to ease
A fuel-cell vehicle has no emissions because it runs on the power
created when hydrogen, stored as fuel in the vehicle, combines with
oxygen in the air to emit water.
Honda said it expects to lease several dozen of its new fuel-cell
vehicle, the FCX Clarity, per year - mostly in California - reaching 200
vehicles in the initial 3 years. The leasing is set to start in July
2008 in the United States and a few months later in Japan.