Fuel economy, with economy

TOKYO — Yasunari Seki was just sitting down at a Chinese restaurant in Torrance, Calif., with fellow engineers from Honda Motor Co. when the call came from across the Pacific.

Drop all your work on clean diesels, product planning chief Hiroshi Takemura told him. Return to Japan for a bold new project meant to shake up the hybrid marketplace.

So began Seki's assignment as chief engineer of the vehicle destined to become the new Honda Insight. His mission was twofold: Create a car to challenge Toyota's Prius as the global hybrid king and cut enough cost to create a hybrid that people could afford.

"After the phone call, I couldn't eat a bite," Seki recalls of that dinner on Jan. 19, 2006.

Three years later, his Insight has become the template for future Honda hybrids, including the upcoming CR-Z sporty hybrid and a hybrid version of the even smaller Fit. More important, the five-door Insight hatchback sets a new industry benchmark for hybrids as small and inexpensive.

Seki, who turns 51 on April 1, eked out creative cost cuts not only from a redesigned electric-gasoline drivetrain but also from the chassis, interior and engine. The result is a package that competitors — including archrival Toyota Motor Corp. — will be hard-pressed to match.

Honda saw a low sticker price as key to the Insight's success. And pressure from President Takeo Fukui was relentless. First he wanted it under $20,000. Then he wanted it by 2009.

"It was all driven by traps that President Fukui laid for us," says Seki, a 27-year Honda employee who worked on the Acura Integra and Legend and Honda Accord before turning to clean diesels.

Seki delivered: The Insight reaches U.S. showrooms March 24, priced at $19,800; freight charges bring the total to $20,470.

Yet getting the car there was anything but easy. In textbook Honda fashion, Seki re-engineered 97 percent of the Civic Hybrid powertrain to cut costs 40 percent. New nickel-metal hydride batteries supplied by Sanyo are 30 percent more powerful. That allowed Honda to cut the number of battery modules to seven from 11.

Combined with the power control unit, the battery is about 19 percent smaller than the previous generation and 28 percent lighter.

Meanwhile, a new electric motor is 15 percent lighter. Motor output was lowered to 10 kilowatts from 15 kilowatts, made possible by weight reductions. "We set a target for the weight of the actual vehicle and decided how much engine and motor power we needed," Seki says.

But there was only so much room to cut in the electrical parts. More savings had to come elsewhere.

Take the gasoline-powered engine. Like the Civic Hybrid, the Insight uses a 1.3-liter i-VTEC engine.

But the Civic has three-stage valve timing: idle stop, normal and high speed. The Insight has only two modes: idle stop and normal. The decision to simplify sacrificed power but saved money and weight, says Hideharu Takemoto, the Insight's drivetrain engineer.

"The Insight is about 200 pounds lighter than the Civic Hybrid," Takemoto says. "So even without high-speed valve timing, the car's dynamic performance is pretty good."

Honda also borrowed as much as possible from the existing parts bin. Hence, the Insight shares about 36 percent of its parts with other models. The cylinder block, front end structure and much of the chassis is the same as on the Fit.

That was one of the limitations in not being able to achieve better fuel economy, says Seki. Redesigning doors or window sashes would have improved aerodynamics, possibly helping the Insight score a better EPA rating than its 40 mpg city/43 highway.

But Honda worked off the existing structure of the Fit. The Insight's fuel efficiency falls short of the next-generation Prius, which debuts in May and gets 51 mpg city/48 highway.

In fact, despite its wedge-shaped, Prius-like silhouette, the Insight actually has a worse drag coefficient than the Civic Hybrid.

The trade-off for lower costs, Seki says, was a slightly lower fuel-economy rating.

Honda also went no-frills on the Insight's interior, using many plastic moldings that critics say give it a low-end feel. Seki acknowledges this but says Honda spent money instead on the Insight's futuristic instrument panel, which changes color as a gauge of efficient driving.

If Japan is any indication, the effort to trim costs hit a sweet spot.

The car went on sale in Tokyo on Feb. 6 and has racked up 18,000 orders in Japan, more than triple Honda's monthly sales target of 5,000 units.

The redesigned Prius is expected to be more expensive. The current, second-generation Prius starts at $22,720, including shipping, in the United States. But the new model has a bigger engine, roomier interior and lots of options commonly found in premium cars.

With gasoline prices far below the highs of last year, customers will see less reason to spend big on hybrids. That goes for the new Prius, even if it gets 51 mpg compared with the Insight's 40.

In a sign of frayed nerves at Toyota, Toyota dealers are telling Japanese media that the automaker may keep selling the current version of the Prius alongside the third generation. Toyota is not commenting.

And the Nikkei business daily reported on Friday, March 13, that Toyota is considering a new hybrid model priced 20 to 30 percent below the current Prius by modifying Prius parts. Toyota declined comment.

The brewing hybrid war suggests Honda may be on to something with inexpensive hybrids. While competitors roll out ever bigger and more expensive hybrids, go-it-alone Honda has focused on making them small and low-priced.