Honda Motor said yesterday it would spend US$1.5 billion on two new plants in Japan as it steps up production of fuel-efficient cars, including a new low-cost hybrid scheduled to be launched early next year.
Japan's second-largest automaker will build a plant making fuel efficient engines next year and a new manufacturing plant in 2010, Honda Motor president Takeo Fukui told a press conference.
Honda confirmed it was on track to introduce a low-cost gasoline-electric hybrid next year. It is aiming for initial annual sales of 200,000 of the compact five-door passenger size car.
Honda also plans to introduce a hybrid version of its Fit compact car along with a new sports hybrid and a new gasoline-electric version of its Civic.
It is aiming for total sales of the four models of 500,000 vehicles a year by the middle of 2010, Fukui said.
“What’s important is to shift the status of hybrid cars from the current image-oriented stage to the new stage [of] full-scale penetration” of the overall market, he said.
Along with its main rival Toyota Motor Corp, Honda is a pioneer of hybrid-engine cars, which save fuel costs and are attracting growing interest at a time of soaring oil prices.
However, the cars are still more expensive than conventional cars and represent just a small share of the total vehicle market.
Honda aims to reduce the premium customers have to pay for a hybrid to about ¥200,000 (US$1,800), from as much as ¥500,000, Fukui said.
“If we could shrink the price gap to less than ¥200,000, then hybrids can compete with conventional cars” based on their lower fuel consumption, Fukui said.