DETROIT (Reuters) - Honda Motor Co will begin selling the Insight, the first of its next generation low-cost hybrid cars, in Japan in February, followed by launches in Europe and the United States in March and April.
The dedicated hybrid model, a production version of which made its debut at the North American International Auto Show in Detroit on Sunday, has listed mileage of 40 miles per gallon in city driving and 43 mpg on the highway in the United States.
But Yasunari Seki, the Insight’s chief engineer, said it has proven potential of as much as 72 mpg, or about 30 km/liter, aided by an “eco-lamp” color meter that goes from shades of blue to green to prompt fuel-efficient driving.
“We had a contest for journalists test-driving it on a course last month and the winner got 72 mpg,” Seki told Reuters ahead of the auto show, which opened to the press on Sunday.
Japan’s No. 2 automaker has said the five-door, five-seater Insight was its first true attempt to mass-market gasoline-electric hybrid cars, which twin an electric motor and a conventional engine to boost mileage.
Honda launched its first hybrid, also called the Insight, in 1999 and added the fuel-saving system to existing models such as the Accord and Civic. But the cars were deemed underpowered, especially compared with Toyota Motor Corp’s hot-selling Prius. Honda eventually discontinued production of all but the Civic hybrid model.
In the past decade, Honda has sold about 300,000 hybrid cars against 1.7 million for Toyota, which was just two years ahead with its first hybrid.
Toyota is also launching two new hybrid cars at the Detroit auto show -- the third-generation Prius and the Lexus luxury brand’s first dedicated hybrid model.
But the launches come at a bad time.
Gasoline prices have fallen below half last year’s record high of over $4 a gallon. A dearth of credit availability and an economic crisis have also hammered global demand for cars.
“It’s not the best timing,” said Seki, who agreed with Honda CEO Takeo Fukui’s view that reaching the Insight’s global sales target of 200,000 units a year might be tough.
Seki said that for hybrids to be a “no-brainer” for consumers looking to save at the pump, a technological breakthrough was needed to improve the hybrid system.
That meant, for example, halving the system’s cost, now mostly tied to the battery, or getting more output from the same number of battery modules, he said.
Honda roughly halved the cost of the system for the new Insight, which is due to be followed by a family of affordable gasoline-electric cars including a compact sports car, the Fit subcompact, a next-generation Civic hybrid, and others.
Honda has said it would price the Insight below 2 million yen ($22,140) in Japan, or about $5,000 cheaper than the Civic hybrid. It did not disclose the pricing for the North American market, where it wants to sell half of the new Insights.
“It would depend a lot on the exchange rate,” Seki said.
Despite the tough sales conditions and cheaper gasoline, Seki said the consumer trend toward fuel-efficient vehicles was solid in the long-run given the exhaustible supply of fossil fuels.
“In Japan, gasoline prices have fallen to about half their peak, and yet a lot of gasoline stands are folding and demand isn’t returning,” he said. “I think that’s based on consumers’ belief that eventually, gasoline prices will rise again, and in that respect they would be looking for fuel efficiency.”
Reporting by Chang-Ran Kim, editing by Peter Bohan
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