Honda sees big hybrid volume push with next model

TOKYO (Reuters) - Honda Motor Co will start churning out gasoline-electric hybrid cars in large volumes in earnest with a hybrid-only family car planned for a 2009 launch, Chief Executive Takeo Fukui said on Tuesday. Japan’s second-biggest automaker ranks a distant second behind Toyota Motor Corp in the hybrid market, now selling only the Civic hybrid after discontinuing production of the Insight two-seater and gasoline-electric Accord.

“Right now, the Civic hybrid is pretty much hand-made,” Fukui told an industry conference ahead of the Tokyo Motor Show.

“We don’t have much of a desire to expand volumes under these circumstances,” he said, citing the high cost of producing the fuel-sipping vehicles.

Honda, which launched its first hybrid, the Insight, in 1999 -- beating Toyota to the U.S. market -- has admitted to making no money on sales of hybrid cars, which add a pricey electric motor and battery to capture energy while driving.

But Honda is working on lowering production costs, promising a hybrid that would have a premium of up to 200,000 yen ($1,750) for consumers over a similarly sized gasoline-engine car -- a difference that Fukui said would be low enough to be made up for in lower running costs.

With the cheaper hybrid system, Fukui said twinning it with a diesel engine for further fuel savings was a possibility if gasoline prices continued to rise.

But he was skeptical about up-and-coming plug-in hybrids, or a hybrid car that can be recharged through an electric socket, saying it would require heavy batteries being loaded on the vehicle.

“I’m not sure what kind of real advantages they would have,” he said.

General Motors Corp has been notably keen on the powertrain, aiming to begin production in 2010.

Fukui said Honda had more faith in zero-emission fuel-cell vehicles, which run on hydrogen fuel, for the future.

“I think in 10 years’ time, we will have come much, much closer to mass-volume production,” he said.