Honda to Expand Hybrid Lineup to Compete With Toyota

Honda Motor Co., Japan’s second- largest carmaker, plans to expand the number of hybrid vehicles it offers domestically to compete with Toyota Motor Corp.’s best-selling Prius.

The carmaker will bring out a hybrid version of the Fit car next year and the hybrid CR-Z sports coupe in February, Chief Executive Officer Takanobu Ito told reporters today in Tokyo.

The new vehicles will give Tokyo-based Honda four hybrids in its lineup. Toyota introduced its third-generation Prius in May, overtaking Honda’s hybrid Insight as the best-selling gasoline-electric car in Japan.

“Applying the hybrid system to smaller vehicles will help Honda boost sales,” said Yoshihiro Okumura, who helps manage the equivalent of $365 million at Tokyo-based Chiba-gin Asset Management Co. “Once the U.S. market starts to pick up, they’ll be well-positioned.”

Honda is also developing a new hybrid system to be installed in mid- to large-size vehicles. Hybrid versions of all of its models should be available within 20 years, Ito said.

Toyota, which aims to have hybrid versions of all its car models by 2020, plans to introduce four new gasoline-electric hybrid models in Japan and three overseas by the end of March. It also has plans for a low-cost hybrid, smaller and cheaper than the Prius.

Sales Forecast

Honda expects global sales to drop 8.7 percent this fiscal year ending in March to 3.21 million vehicles, compared with 3.52 million units last fiscal year.

In Japan, where Honda has introduced its new Insight hybrid, sales may drop 0.2 percent to 555,000 units. Tax cuts and subsidies on fuel-efficient models are pushing up car sales in the domestic market. Sales in North America, its biggest market, may fall 9.8 percent to 1.35 million vehicles. A recovery in the market may come in the second half of next fiscal year, Ito said.

Industrywide sales in the U.S. may reach 10.5 million units in 2009, Executive Vice President Koichi Kondo said on April 28. That compares with an annual rate of 9.1 million units in February, the lowest since 1981.

Among future models, Ito said he would also like to bring to market an affordable, fuel-efficient sports car. Honda in December said it axed development of a successor to the NSX sports car with a V-10 engine.