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Thu, May 22, 2008 - Page 10 News List

Honda to raise spending on hybrids


The president of Japanese auto giant Honda Motor, Takeo Fukui, rides on the first model of the company's hit motorcycle "Cub" series after a press conference at the company's headquarters in Tokyo yesterday.


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.

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