Honda just keeps slashing the cost of hybrid technology in a Quixotic quest to undercut the mighty Toyota Prius. It reportedly plans to offer the forthcoming Fit Hybrid in Japan at a price some say could spark a price war between Japan's two biggest automakers.
Reuters, by way of Japan's Nikkei business daily, says the Fit Hybrid will go for 1.5 million yen -- about $16,780 -- when it goes on sale in Japan this fall. That's about $2,500 less than the starting price of the Honda CR-Z we'll see in August and $3,000 less than the entry-level Honda Insight. It undercuts the Toyota Prius by a little more than six grand.
Honda isn't commenting. But company CEO Tekeo Fukui has said the company will "usher in an new era of affordability" for hybrids, which typically carry a premium over their gasoline-powered counterparts. The Hybrid Civic, for example, starts at $23,800 to the base car's $15,655.
But if the Nikkei report is to be believed, the Fit Hybrid will carry a premium of just $1,880 over the base model (shown above).
"Lower prices are good for consumers but not for shareholders," Yoshihiko Tabei, an analyst at Kazaka Securities, told Reuters. He said we could see a hybrid price war between Honda and Toyota that could be punishing to both companies.
"Toyota has finally begun enjoying profits on the Prius and Honda is barely making profits on the Insight," he said. "It will be tough for them to make profits on hybrids."
Photo: Honda
