AUTOSHOW-Honda to boost hybrids in Europe small-car drive

GENEVA, March 4 (Reuters) - Honda Motor Co (7267.T) will expand its range of gasoline-electric hybrid cars to grab a bigger share of Europe's small-car segment, a top executive said on Tuesday.

Honda, Japan's second-biggest automaker, now has just one hybrid model - the Civic - after discontinuing production of the Accord hybrid and the two-seater Insight but has promised to offer cheaper hybrid cousins from next year as it slashes production costs on the expensive drivetrain system.

"We'll beef up our hybrid line-up in the small-car segment, and that should fuel sales volumes higher," Shigeru Takagi, president of Honda Motor Europe, told Reuters in an interview at the Geneva auto show.

Honda, a distant second to Toyota Motor Corp (7203.T) in the miniscule but growing hybrid market, is scheduled to launch a hybrid-only compact family car next year, with an annual global sales target of 200,000 units.

Half of that will be sold in North America and the remainder in the rest of the world.

Takagi said in addition to that car, Honda will bring the CR-Z hybrid sports car - still seen only in prototype form - as a next step, adding the product offensive "would not stop there."

Honda last year sold 10,512 Civic hybrids in Europe, compared with 3,000 in 2006.

At the same time, Honda will continue to offer more diesel vehicles, including the new Accord sedan and tourer models, which made its world debut at the Geneva auto show. The cars go on sale in June.

Diesel cars make up around 27 percent of Honda's European sales, compared with about half across Europe. Toyota, another hybrid enthusiast, sold 44 percent of its European cars as diesels.

Honda boosted its European sales by 22 percent to 376,856 cars in 2007 and aims to raise that to 420,000 this year. That is with little help from the next-generation Jazz/Fit subcompact, which will be available only at the end of the year.

Most of the Jazz cars sold in Europe are made at Honda's export-only factory in China. (Editing by David Cowell)