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Friday, Feb. 6, 2009
Honda hoping new Insight hybrid challenges dominance of Prius
Honda Motor Co. threw the spotlight Thursday on its new Insight hybrid, which goes on sale Friday, hoping its cheaper price challenges the gasoline-electric hybrid market dominance of Toyota Motor Corp.'s Prius.
But recession-hit buyers may want to hold off until April, when they stand to save over ¥100,000 in taxes.
The eagerly awaited Insight is smaller, lighter and less expensive than the Prius, the world's top-selling hybrid. With the Insight, Honda said it is aiming to change people's perceptions of hybrids being too expensive.
"The key to spreading hybrids is fuel-efficiency and to have customers feel the joy of driving, as well as an attractive price," Honda President Takeo Fukui told reporters.
"For Honda and for the future of automobiles, I believe it will become an important car that raises a curtain on the new future of widely driven hybrids," he said.
Going on sale Friday, the five-door Insight hatchback is priced between ¥1.89 million and ¥2.21 million, whereas the Prius currently starts at ¥2.331 million.
In addition, due to new tax incentives soon to debut to promote more eco-friendly vehicles, the levy on the ¥1.89 million Insight will be ¥108,500 cheaper from April.
Honda will start selling the Insight in Europe at the end of March and in the United States in early April. It aims to sell 200,000 units a year worldwide.
The Insight is Honda's first sole hybrid. The nation's No. 2 automaker launched its first Insight in 1999 but stopped production of the two-seater, three-door hatchback in 2006.
"The Prius is marvelous because it helped hybrids take root in society. With the Insight, we want to have more people drive hybrids," said Yasunari Seki, who led the Insight project at Honda R&D Co., the group's research and development unit.
"To achieve that goal, we have developed the Insight to make it more compact and light-weight, and to reduce costs," he said.
The focus on hybrids' fuel-efficiency has intensified in recent years amid hikes in the price of gasoline. The Prius, which debuted in 1997, currently dominates the domestic hybrid market.
Competition seems to be intensifying, with Toyota set to release the third-generation Prius in mid-May in Japan, then later overseas.
Toyota unveiled the new Prius at the international auto show in Detroit last month. According to the carmaker, the new model is more powerful and fuel-efficient, as it boasts an 1,800cc engine, up from 1,500cc.
Honda said the smaller, cheaper Insight isn't intended to vie with the Prius head-on.
"We don't think the Insight will vie with the Prius because it belongs to a lower class and the price range is also lower," Seki said.
Analysts meanwhile said the Insight is more competitive in terms of price than the current Prius, even though the Prius is more fuel-efficient.
The fuel-efficiency of the Insight is 30 km per liter. The Prius boasts 35.5 km per liter.
"Compared with the Prius, the Insight has more price competitiveness," said Yasuaki Iwamoto, an automobile sector analyst at Okasan Securities Co. "The Insight is good for those who don't have to drive far."
Since the Prius is more expensive than the Insight, people need to drive the Prius much longer to make the most of its fuel-efficiency, he added.
Honda and analysts said its lighter weight and simpler driving system helped cut the price.
Car imports plunge
Sales of imported vehicles in Japan, including Japanese cars built abroad, plunged 37.2 percent in January from a year earlier to 8,915 units for the ninth consecutive monthly fall, according to preliminary data released by an industry body Thursday.
Sales of foreign-brand vehicles nosedived 34.3 percent to 7,657 units, while those of Japanese vehicles plummeted 50.2 percent to 1,258 units, the Japan Automobile Importers Association said.