Honda in No Hurry to Expand Its Hybrid Car Product Line
Honda Motor Co. won’t be hasty in adding more gasoline-electric hybrid autos to its product line because the company won’t sacrifice profit as it expands use of the fuel-efficient system, the company’s chief executive said.
Honda and Toyota Motor Corp. have sold hybrid cars in the U.S. for more than two years. Toyota has said it will announce new models in early 2003 beyond its Prius small car. Honda officials have said they have no short-term plans to expand beyond the two-seat Insight subcompact and the Civic Hybrid.
“We have some plans for the future, but we’re not so hasty in bringing our technology into the market even though we can do it anytime,†said Hiroyuki Yoshino, Honda’s president and chief executive. Any vehicle could get a hybrid powertrain, Yoshino said, without specifying when a decision would be made.
Hybrids were developed to meet stricter environmental rules in the U.S., Japan and Europe. They have improved fuel efficiency and low tailpipe pollution. Toyota and Honda, the only companies that sell such models, have struggled to overcome an added per-car expense of at least $3,000 for the system, which combines a gas engine, electric motors, batteries and regenerative brakes.
Honda’s Civic Hybrid, with a U.S. base price of $19,550, sells for an amount that recovers the added component cost. It will be years before Honda recoups its investment in developing the technology, Yoshino said.
“It’s not surprising Honda may want to take a more financially conservative approach than Toyota. They’re still a much smaller company,†said analyst Thad Malesh, who studies alternative-power technologies at J.D. Power & Associates. “Even if they don’t add anything next year, they’ll benefit from a tailwind created by Toyota’s announcements.â€
U.S. hybrid car sales this year should reach almost 35,000 units, Malesh said. Honda estimates it will sell about 13,000 Insight and Civic Hybrids in 2002. Toyota sold 18,329 Prius models this year through November and expects full-year sales of 20,000.
Honda’s U.S. operations are based in Torrance. The company’s American depositary receipts, which each represent half of an ordinary share, fell 10 cents to $18.45 in New York Stock Exchange trading. The shares have fallen 9% this year.
