Honda overhauls hybrid strategy to boost U.S. sales
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November 19, 2012 12:00 AM

Honda overhauls hybrid strategy to boost U.S. sales

Ito's plan focuses on 3 new systems, variants of existing nameplates

Hans Greimel
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    Honda may not build a next-generation Insight hybrid.

    TOKYO -- Honda Motor Co. has yet to have a hybrid hit in the United States, despite success in Japan.

    In the United States, the Insight and CR-Z have struggled, while the gasoline-electric Civic has gained only modest traction. Honda even temporarily discontinued its Accord Hybrid after 2008 because of dismal sales.

    But Honda is making another run at the segment. This time, President Takanobu Ito says he is serious about challenging Toyota's Prius lineup.

    Ito says Honda might not match Toyota in hybrid unit sales, but as a percentage of volume, Honda will come close.

    "If you look at the corporate size of Toyota, it's far bigger than us. So if you look at the raw number, now that's difficult," Ito told Automotive News. "But if you look at the percentage of hybrid vehicles among our total sales, I think we can get to a level that's not less than Toyota."

    He added, "One thing that is for sure is that this is one technology that will definitely be necessary in the United States."

    In Japan, Honda's hybrid vehicles -- led by the Fit -- account for about half its domestic sales.

    Now Honda is overhauling its hybrid strategy.

    For starters, Ito is jettisoning the integrated motor assist label to describe the company's hybrid system. Honda has used that name for years, but it has become associated with the company's earlier generation of underpowered, one-motor hybrids that never matched the fuel economy of their rivals from Toyota.

    A new name, sport hybrid, will be used for a lineup of three new hybrid technologies geared toward different sized cars. The new hybrids get lithium ion batteries, new transmissions and, in some cases, hybrid-oriented engines. Honda also will focus more on introducing hybrid variants of existing nameplates instead of hybrid-only models such as the Insight.

    Ito: Systems for different sized vehicles

    Ito is noncommittal on whether Honda will produce a next-generation Insight. The current, second-generation version debuted in 2009 as Honda's Prius fighter. But it never caught on. Through October, U.S. sales have collapsed 63 percent to 5,298 units, after sliding 26 percent in 2011.

    "I can't promise it, but we want to continue to at least take care of the product name Insight," Ito said of a successor. "We don't want to just let it die out. We want to continue to give Insight some kind of symbolic meaning."

    The Insight has sentimental value because it is the name of Honda's first commercialized hybrid, a two-seater that hit U.S. showrooms in 1999, in time to edge the Prius as the first gasoline-electric car in the United States.

    But Ito says the hybrid market has changed a lot.

    "The basic direction is to provide a hybrid among the variants. The times have changed from the era when people saw hybrids as something rare, when people said they want a car because it's hybrid," Ito said. "When we want to sell to the masses, our strategy is to add a hybrid type to an existing model."

    Honda's revamped strategy hinges on three new hybrid systems:

    1. A one-motor system for small cars such as the Fit and Insight. The system has been re-engineered with a new engine, transmission, electric motor and battery.

    The lithium ion battery will replace the nickel-metal hydride unit. The electric motor will power the wheels and recharge the battery.

    The drive unit also gets a new fuel-efficient Atkinson-cycle engine combined with a new seven-speed, dual-clutch transmission. It will be 30 percent more efficient than the current one-motor integrated motor assist system used in the Insight, CR-Z and Civic Hybrid, Honda says.

    The next-generation one-motor system will debut in the third-generation hybrid Fit due next year in Japan. Honda hasn't disclosed the timing of U.S. sales.

    2. A two-motor powertrain for larger cars such as the Accord. It will allow for extensive electric-only driving and get a lithium ion battery. In the two-motor layout, one motor powers the wheels, while the other recharges the batteries.

    This system also gets a new hybrid-dedicated engine but combines it with a continuously variable transmission. The hybrid Accord is expected in early 2013.

    3. A three-motor hybrid powertrain for top-end models such as the Acura NSX sports car and RLX sedan. This system uses one motor in the powerplant, plus electric motors at both rear wheels to deliver independent torque for tighter cornering.

    The first motor is connected to the engine, provides additional torque to the wheels and recharges the battery.

    The second and third motors help power the car as well as provide sharper handling and additional regenerative-braking capability to recharge the battery.

    It gets a new fuel-injected 3.5-liter V-6 engine and a newly developed seven-speed, dual-clutch transmission.

    The NSX will be built in Ohio and go on sale in 2014.

    Ito declined to give midterm sales projections for hybrids.

    He said the technology is a must-have to meet increasingly stringent emissions standards. But Honda's plans for Acura hybrids show that Ito also aims to promote the technology as a way to boost power. Toyota has had scant success using added horsepower as a marketing pitch for its Lexus hybrids.

    That three-pronged plan leaves open the question of which system Honda will install in future hybrid versions of the Civic small car. Ito says it is undecided.

    The two-motor system from the Accord would deliver superb fuel efficiency but would be costly. The re-engineered one-motor system from the Fit would be cheaper but less powerful.

    Ito said Honda's r&d center in the United States will take on hybrid-related work as it expands. That is a must if the United States is to take the lead in developing the next-generation Accord, with its hybrid variant.

    "If we want to do the next-generation Accord in the United States, by then, we expect that the hybrid penetration rate will have increased," Ito said. "So we would have to add a facility related to hybrid technology."

    The upgrade would require battery-testing and high-tech electronics facilities, Ito said, plus the transfer of hybrid know-how from Japan to North America.

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