Honda bets big on small Vezel crossover, eyes turbo for U.S.

The Vezel is about 9 inches shorter than the CR-V, currently the smallest crossover in Honda's U.S. lineup.

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WAKO, Japan -- Honda Motor Co. is ready to take a run at one of the U.S. auto industry’s fastest-growing segments: compact, sporty crossovers.

The Vezel -- a small crossover based on Honda’s redesigned Fit subcompact -- goes on sale in Japan on Dec. 20 and in the United States in the second half of 2014.

It will compete in an increasingly crowded segment of small utility vehicles that includes such rivals as the Mazda CX-5, Nissan Juke and Subaru XV Crosstrek.

It will be slotted below the CR-V, one of Honda’s top-selling U.S. models with annual sales projected to top 300,000 units for the first time in 2013.

Vezel is the car’s Japan-market name. The U.S. name will be announced later, Honda said today.

In the United States, Juke sales have climbed 4 percent this year and Mazda CX-5 demand has surged 95 percent. Sales of the new Subaru XV Crosstrek have totaled 48,216, while Buick Encore sales are 29,195.

CR-V vs. Vezel

The Vezel is about 9 inches shorter than the CR-V, currently the smallest crossover in Honda’s U.S. lineup, as well as 1 inch narrower and 1 inch lower. The wheelbase is also about 1 inch less. The vehicle is 7 inches longer than the current Fit hatchback.

In Japan, the hybrid version of the Honda Vezel is expected to account for 90 percent of sales. Not so in the United States.

Honda won’t even offer the hybrid variant in U.S. showrooms initially. When U.S. sales begin, the Vezel will have a standard gasoline engine.

Down the road, the Vezel will get a turbocharged version to improve fuel economy and boost power, Yoshiharu Itai, the crossover’s chief engineer, says.

Turbo timing unclear

Timing of the turbo debut hasn’t been decided, but Itai said he expects to use the new line of small turbo engines Honda introduced last month before the Tokyo Motor Show. He is considering the 1.5-liter turbo, which Honda showed in an Acura ILX sedan.

“We haven’t decided yet what model year it will be, but we have that in our plan,” Itai said of a turbocharged Vezel at a recent briefing outside Tokyo. “We are creating a package so that turbocharging could be installed with this model.”

A hybrid version may come to the United States, but no decision has been made.

The front-wheel-drive Vezel weighs about 680 pounds less than the front-wheel drive CR-V. The Vezel comes in a front-wheel or all-wheel-drive layout.

The Vezel’s hybrid drivetrain is the same newly developed one-motor, dual-clutch lithium ion battery system used in the third-generation Fit hatchback that debuted this year in Japan.

Engine combos

The hybrid system combines a 1.5-liter direct-injection Earth Dreams engine with a seven-speed dual-clutch transmission and 22-kilowatt electric motor. The standard gasoline version teams the 1.5-liter engine with a continuously variable transmission.

The current U.S. Fit hatchback uses a 1.5-liter engine. The CR-V has a 2.4-liter engine.

Honda has not divulged the U.S. drivetrain configuration for the Vezel.

The 1.5-liter turbocharged engine Honda has developed is seen as a replacement for 1.8-liter powerplants. Compared with a 1.8-liter naturally aspirated engine, Honda says, the 1.5-liter turbo provides 15 percent better fuel economy and 45 percent better torque.

That engine is expected to hit the market in early 2016.

Mexico plant

Honda is waiting on a hybrid for the United States, partly because demand doesn’t warrant importing it from Japan. Honda plans to source all U.S. Vezels from its new plant in Mexico, Itai said. Honda built the plant as a hedge against exchange rate losses on imports and as a low-cost manufacturing center that could deliver better margins on entry-level cars.

A spokesman said Honda wants to establish the gasoline version in the market before deciding on whether to add a hybrid option to the lineup.

The crossover is key to Honda President Takanobu Ito’s push to boost global sales to 6 million vehicles in the fiscal year ending March 31, 2017, from 4.01 million in the fiscal year ended March 31, 2013.

By 2016, the Fit hatchback and its Vezel crossover and City sedan variants will account for worldwide sales of 1.6 million units, Ito says.

U.S. sales surge

Honda is also banking on the vehicle to fuel a big surge in U.S. sales. Honda built the new plant in Mexico with capacity of 200,000 units just to make the crossover and the Fit hatchback. More than half of the plant’s capacity will be devoted to the crossover, says Ito.

That incremental volume would bring Honda a big step closer to its ambitious North American sales goal of 2 million in the fiscal year ending March 31, 2016. Honda sold 1.7 million units in the last fiscal year and expects to sell close to 1.8 million in the fiscal year ending March 31, 2014.

Itai said the company ideally wants to keep the name standardized because it is a global strategic vehicle. But Honda officials say it may be tweaked to suit local markets.

The Japan name comes from the word “bezel,” the mounting for gemstones. But it gets a befuddling Japanese twist in swapping the “b” for a “v,” two sounds often indistinguishable to the Japanese ear.

You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on Twitter


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