Honda to release cheapest hybrid vehicle in Japan

Honda's new Fit hybrid compact. (Photo courtesy of Honda Motor Co.)
(Mainichi Japan) August 9, 2010
Honda Motor Co. is set to release the country's cheapest hybrid vehicle in October, the company has announced.
The automaker aims to expand sales of its new "Fit" hybrid compact car by setting its price at around 1.6 million yen -- about 300,000 yen cheaper than the Honda Insight hybrid that hit the market in February last year.
Powered by a hybrid drive system combining a 1.3-liter gasoline engine and an electric motor, Honda's new eco-friendly car will offer excellent fuel efficiency equivalent to that of its predecessor Insight, at around 30 kilometers per liter.
Furthermore, the hybrid edition will only be some 400,000 yen more expensive than the conventional Fit gasoline vehicle (approximately 1.2 million yen) -- which travels around 24 kilometers per liter -- through the sharing of parts with Insight and other cost saving efforts.
Japan's new car market was hit hard by the economic downturn triggered by the collapse of Lehman Brothers, but has gradually been recovering thanks to the government's subsidy program for eco-car purchases.
However, with the incentive program scheduled to expire at the end of September, some market insiders are concerned that the nation's new car sales will slow down once again.
Amid the situation, Honda hopes to leverage its sales by launching the low-end hybrid model and catch up with Toyota Motor Corp., which leads the eco-car market with its popular New Prius hybrid car.
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