Honda to roll out cheap new hybrid model in early '09

Toyota, the world's biggest automaker, is aiming to achieve annual hybrid sales of 1 million vehicles soon after 2010, also targeting roughly one-tenth of its total sales.

Few other automakers have managed to mass market hybrid cars after Toyota blazed the trail with the first Prius in 1997.

Nissan Motor Co, Japan's No.3 automaker, is due to launch its own, in-house developed hybrid car in 2010, the same year General Motors Corp plans to launch its plug-in hybrid, the Chevrolet Volt.

Honda shares ended down 2 percent in a weaker Tokyo market and have fallen about 11 percent this year, outperforming Toyota, Nissan and GM, which have fallen 13-24 percent.

MANUFACTURING INNOVATION

At its mid-year news conference, Honda also outlined plans to introduce new manufacturing methods at several Japanese factories to boost efficiency and lower costs.

Honda said it plans to invest about 158 billion yen to make the improvements at two domestic factories, one for engines and the other for cars. The car factory, in Yorii, near Tokyo, is due to start production in 2010.

A new minivehicle factory to be built by subsidiary Yachiyo Industry Co would also introduce innovations that would help Honda gain low-cost know-how, Honda said.

"Fundamental reform and improving cost competitiveness in the minivehicle market, where cost pressures and customer expectations are very severe, will enable Honda to gain a significant edge in fighting intensifying global competition in future," Fukui said.

Honda, which plans to improve fuel efficiency on bigger cars with clean-diesel technology, 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.

(Additional reporting by Elaine Lies; Editing by Lincoln Feast)

($1=103.70 Yen)