There was a Wallstreet Journal article in Thursday's paper about Honda goal of aggressively increasing its goal of boosting annual sales by more than 20%. The article titled Honda Will Offer More Fuel-Efficient Models for Drivers said that Honda set a goal to sell four million cars, trucks and vans world-wide over the next three years. They allso have set a goal of improving fuel efficiency by 11% to 13% the same period in the engines they put in "such models as the Accord sedan, the Odyssey minivan or the new Ridgeline light pickup. In its motorcycle division (Honda is the world's biggest motorcycle maker) the company says it plans to improve fuel efficiency by as much as 30%."

The article also goes on to say that "hybrid technology isn't a slam dunk for consumers. In most cases, the hybrid propulsion system, which can boost the sticker price by thousands of dollars, doesn't save enough in gas consumption over the life of the car to make them economical. Both Toyota and Honda have been trying to get around this barrier by selling hybrids as a performance technology, noting that the electric motor can add to the punch of the conventional combustion engine."

In another paragraph the article also talkes about Honda being the "first auto maker to offer a hybrid vehicle, the futuristic Insight, which went on sale in the U.S. in 1999." The article continues to suggest that "recently the sales momentum in hybrids has gone to Toyota, which is rolling out a second generation of hybrid vehicles, everything from its own geeky Prius econobox to high-end Lexus sport-utility vehicles such as the RX 400h. May sales of the Prius, at 9,461 cars, did better than such mainstream high-volume rivals as GM's Pontiac G6 and the Chrysler Pacifica.

So my question ... Is Honda tossing in the towel and giving Toyota the highmileage Hybrid business and focusing on growing through high efficient 'gas' only mean? Or will they continue the trend to us hybrid technology just to add 'punch' for performance and using efficient gas engines for everything else?

 

As described in the article and in Honda's 3 year plan you do get a sense that Honda is decreasing emphasis on the high-efficiency hybrid platform, and increasing emphasis on getting as much efficiency in all of their engines/models by whatever means possible, including VCM, FI, low friction, and valve timing. Honda is probably thinking that it can get better fuel economy for more of its fleet at a cheaper price by improving on existing ICE technologies instead of concentrating on future "niche" models like the Insight. Honda will also be able to pass those savings down to future buyers who won't have a large premium or any premium at all for increased fuel efficiency.

But I would not count Honda out of the high-efficiency hybrid market until we know the specs of the 2006 Civic Hybrid. Unless the goal of the next HCH is totally different than the current HCH (horsepower #1 instead of efficiency) or the "3 stage IMA" is just marketing hype, the next HCH should prove to be significantly more efficient than the current gen.

 

Real-world fuel economy of the HCH is within a few MPG of the Prius anyway, at least according to the GreenHybrid database. Honda's suggested the 2006 will have another 20 horsepower and 6% better fuel economy. If the pricing stays similar, it will be darn close to equal to Prius FE in real-world driving while having a lower price than the Prius.

As for their overall strategy, Honda has in the past said that Toyota's talking out the side of their mouth with all this fuel economy stuff since Honda's corporate fuel economy average is much higher than Toyota's anyway. This is largely due to some of Toyota/Lexus' top sellers being V8 models of course, and Honda does not sell V8 vehicles of any sort.

IMHO, it only makes sense to apply all your most advanced technology to the largest market offerings such as the Civic and Accord since by spreading the R&D cost over a large number of units, you lower the cost per vehicle to develop the technology. That can make it easier to use that technology on specialty models like the hybrids because it's already "paid for" by the mass-market version.