Honda plans to boost profits with a new economical 2009 hybrid

Considering the environment for auto sales in Honda's (HMC) two largest markets, Japan and North America, company chief Takeo Fukui looked remarkably relaxed as he delivered his outlook for the year ahead in Tokyo Dec. 19. It didn't take long to understand why. During the address in Tokyo's Shinagawa district, a confident Fukui predicted another year of overall expansion at the automaker in 2008, including a 3% increase in U.S. auto sales to 1.59 million vehicles despite concerns about the sub-prime crisis and stubbornly high fuel prices. He also predicted spectacular growth in several other key markets.

And in another sign of the Tokyo-based automaker's burgeoning strength, Fukui also promised to give Toyota a tougher run for its money in the battle for eco-supremacy in the years ahead. Honda was an early mover in hybrids. But so far it hasn't been able to benefit with a breakthrough like Toyota's Prius, which dominates the hybrid sector. For instance, Toyota had 79% of hybrid sales in the U.S. in November, compared to just 10% for Honda, the No. 2 hybrid maker. The Prius alone accounted for 50% of all hybrid sales in the U.S. last month.

That's why Fukui says that the battle is only now beginning. According to the Honda chief executive, the last decade was just the first phase for hybrids, a time when automakers focused on marketing a green image. The next phase, he argues, will focus on improving the economics of buying a hybrid. "The price needs to be reasonable and fuel efficiency higher so the [premium] the consumer pays [for a hybrid car] can be returned in a short period of time," he says.

To achieve that goal, he confirmed that Honda will launch a long-awaited, hybrid-only model in 2009. Honda plans on producing 200,000 of the new hybrids per year from the company's Suzuka plant in western Japan and will sell them initially in North America, Europe and Japan. They'll be equipped with a new lightweight motor which will assist the gasoline engine and be offered at a "more affordable price level" than currently available hybrids such as Honda's own Civic and Toyota's Prius.

That's just the beginning. Fukui also said that Honda is planning to launch its first-ever hybrid sports car, based on the CR-Z concept car that Honda first unveiled at the Tokyo Motor Show in October. "The real full-scale hybrid competition will start from now," Fukui told reporters. He added that by 2010 around 10% of Honda's sales would come from hybrids.

Further into the future, the company continues to look to fuel cell technology. Next summer the company will also begin leasing a small number of it's FCX Clarity hydrogen fuel-cell vehicles in Southern California. For $600 a month, customers will be able to drive the emission-free vehicle, which has a range of 270 miles.

One clean hybrid tech that Honda remains at best ambivalent about is plug-in hybrids, which can be charged overnight using a home electricity supply. Echoing comments made by Honda execs at the Tokyo Motor Show, Fukui reiterated that Honda doesn't have high expectations for the tech. One problem, Fukui points out, is that while an electric car is possible with a "dramatic evolution in batteries" a plug-in hybrid "requires a full size engine and fuel tank on top of that." That's something which would increase weight, decrease fuel efficiency and add to the cost. "I'm not convinced why you would want to have that in the first place," he says.

Even without the hybrid assault, Honda is lining up plenty of growth for 2008 and beyond. Indeed, the company is projecting growth in 2008 in every market except Japan, where Honda sales are set to close the year down by 12% at 620,000 units this year. Honda expects its overall auto sales to rise 6% to 3.76 million vehicles during 2007.

In November, it produced more cars in a single month, 363,532, than at any time in its history. "We think Honda looks attractive from a long-term investment perspective," Tatsuo Yoshida, an analyst at UBS noted in a recent research note. Yoshida, who projects Honda's net earnings will rise 9.6% to $7.9 billion this year, rates Honda a "buy".

In the U.S., which accounts for about 41% of Honda's global auto sales, the new Accord, introduced in September, and the opening of new factory in Indiana next fall (the company's seventh U.S. plant) will help Honda continue to gain sales in an otherwise shrinking market. One factor: stubbornly high gasoline prices will help sales of Honda gas sippers. "If you look at the overall trend there's a shift towards smaller cars and fuel efficiency. Those are the customer requirements that will support our products," says Koichi Kondo, Honda's North American chief, who sat alongside the CEO at the Shinagawa conference. Fukui also reiterated that Honda will introduce its new, clean, diesel engine technology into the U.S. in 2009—around the same time it begins launching new hybrids.

But other regions of the world will be Honda's biggest source of growth in the months ahead. In Europe, Asia and South America, the company is set to post strong gains this year and, aided by numerous new plants, expects to do so again in 2008. In China, where sales rocketed 30% this year, the company projects further growth of 17% to 490,000 units in 2008. In the rest of Asia, not including Japan, it's a similar story with sales predicted to rise 20% to 415,000. In India, Honda doubled capacity at its plant in Bangalore to 100,000 this year and has begun building a second auto plant, which will be operational from 2009. Another new plant in Thailand will begin production in the second half of next year.

In Europe, fueled by rising demand in Russia and Central Europe, sales are expected to end 2007 23% higher than a year earlier at 380,000 and should reach 420,000 by the end of 2008. And in South America, where sales are projected to rise 30% in 2007 at 118,000, Honda is adding capacity at its Brazilian plant and, last month, began construction of new factory in Argentina. With so much activity across the globe, the Honda chief's vision of overall growth despite localized weakness makes a lot of sense.

[Via - Businessweek]

China has started making its own hybrid cars

Mass production of the Chinese-designed car, which consumes 20 per cent less fuel than ordinary cars of the same size, was launched after six years of research and development, Xinhua said late on Friday.

"This shows Chinese automakers have grasped the core technology of making hybrid cars," the report said, adding that Chang'an will donate 10 such vehicles for the 2008 Beijing Olympics. The Chang'an group controls listed Changan Automobile Co, a Chinese partner of Ford Motor Co and Mazda Motor Corp The listed arm, based in the southwestern city of Chongqing, is also China's largest mini-van maker.

Demand for hybrid cars is negligible in China, where petrol is subsidised and the impact of polluting factories on local neighbourhoods is more the focus of environmentalists than larger issues such as global warming. Fuel economy figures little in consumers' purchasing decisions in China. Hybrid cars are also expensive since the government offers buyers no incentives to purchase them.

Toyota Motor Corp was the first carmaker to build hybrid cars in China. General Motors Corp said last month it would begin producing a hybrid car in China from next year, in time for the Beijing Olympics in August.

Japan's Nikkei said the hybrid vehicle made by Chang'an is based on a 2-litre compact wagon that will be able to travel 100km on 6.8 litres of gasoline, and it will be officially released next year.

The new hybrid is close in size to Toyota's Prius hybrid, which the Japanese automaker has assembled and sold in China since late 2005, the Nikkei said.

Chinese sales of the Toyota hybrid were down 86 per cent in the first 10 months of 2007 from the same period a year earlier to 299 units, as the vehicle's 300,000 yuan ($NZ52,679) price tag dampened its popularity, it said.

Changan's new offering will cost around 150,000 yuan, roughly 20,000 yuan more than the base vehicle but just half as much as the Prius, the Nikkei said.

[Via - http://www.stuff.co.nz/]

Ford expects a new generation of more powerful batteries to be on the road in hybrid cars in the next three to five years

Ford and its major rivals are all working to adapt the lithium-ion battery technology now widely used in consumer electronics for use in hybrids as a way to boost the fuel economy of vehicles still in the development stage.

"I think within three to five years you'll see lithium-ion hybrid electric vehicles out there in some volume," Ford's chief hybrid engineer, Sherif Marakby, said on Tuesday.

The auto industry's race to develop the new battery technology has drawn close scrutiny because it is expected to open the door to a new market for electric vehicles and allow automakers to meet tougher U.S. fuel economy standards.

Current hybrids, including Toyota Motor Corp's <7203.t> market-leading Prius, run on nickel-metal hydride batteries. That battery technology is seen as approaching the end of its usefulness because of chemical limits on how much power it can store and the cost of the metals it requires.

General Motors Corp is the only mass-market automaker to have committed to a timetable for rolling out a next-generation lithium-ion powered electric car. GM has said it will launch the rechargeable Chevy Volt in late 2010 using lithium-ion batteries the automaker plans to buy from one of two vendors now competing for the high-profile contract.

Toyota executives have said they do not expect lithium-ion batteries to be ready for use in the next generation of the Prius hybrid by GM's 2010 timetable.

For its part, Ford will use nickel-metal hydride batteries in new hybrid sedans slated to go into production next year, the Ford Fusion, the Mercury Milan and the Lincoln MKZ.
But Marakby said subsequent Ford hybrid models -- such as a hybrid variant of the Ford Edge crossover -- could be equipped with the next-generation batteries. "I think we're still looking at those options," he said, speaking on the sidelines of a Ford briefing on its research into rechargeable electric cars, commonly known as plug-ins. Marakby said it would take longer to ready lithium-ion batteries for commercial use in plug-in vehicles, which can be recharged at a normal outlet and can run on battery power alone for short trips.

Ford has been testing a fleet of plug-in versions of its Ford Escape hybrid with one of the nation's largest power utilities, Southern California Edison .
Marakby said it would likely be five to 10 years before plug-in hybrids were sold widely, in part because of the technical challenge of building lithium-ion batteries designed to be frequently drained of all their power.

The expensive battery packs required for a plug-in vehicle are also as much as much as six times larger than the briefcase-sized batteries Ford expects to deploy in its first lithium-ion powered cars. In conjunction with the SoCal Edison, Ford is studying ways to cut the cost of the lithium-ion battery packs for consumers. Marakby said that included studying whether consumers would be able to lease the components for the term of their ownership and then have them recycled to power other kinds of equipment.

[Via - canada.com]

The Hybrid Versions of Chevrolet Tahoe and GMC Yukon Are 25% Better Fuel Efficient

Fifteen fuel-saving hybrid vehicles are hitting the showrooms for 2008, four more than last year. But they're not just gas-sipping compacts anymore.

Two huge SUVs and a full-size luxury sedan are among the new hybrids available for U.S. drivers, giving them a wide choice in price, size and mileage ranges. And the world's manufacturers plan more than a dozen new models using the complex gas-electric technology in the next two years.

The 2008 big SUV hybrids are from General Motors Corp., which had been criticized for offering half-hearted hybrid systems in the past. It is adding a new hybrid system to its popular full-size SUVs, the Chevrolet Tahoe and GMC Yukon. GM says the hybrid versions average 25% better fuel economy while retaining big-truck capabilities.

"This will be the first hybrid in a full-size sport utility vehicle," said Jim Sloan, marketing manager for the Yukon hybrid. "Just because you drive a full-size doesn't mean you're not concerned about being green."

Jim Furcini of Phoenix plans to buy a hybrid Yukon or Tahoe this fall to replace his full-size SUV, but he has no illusions about soaring gas mileage. He said all he wants is to lessen his impact on the environment while "making an attempt to be part of a shift away from oil dependency."

"I want a full-size Yukon or Tahoe for me and my family that offers the greenest possible solution," said Furcini, a 56-year-old building contractor and developer. "I want to be part of the solution, not part of the problem that my generation has created for 30 years."
GM also adds a hybrid system to the 2008 Chevy Malibu, with the same technology used in the Green Line versions of Saturn Vue and Aura.

Another step up in 2008 hybrids is the first full-size luxury sedan, the Lexus LS 600h L, which will be powered by a gasoline-electric system similar to those found in other Lexus and Toyota cars and SUVs. Toyota and its luxury division, Lexus, have been in the forefront of hybrid development.

The 600h also will be the first hybrid with a V8 engine and the most expensive hybrid yet, priced at $104,765.

Neither the big Lexus nor the GM trucks will get the kind of mileage touted by the Toyota Prius or the compact Honda Civic Hybrid, but each shows significant improvements for those drivers who want or need large vehicles.

GM has not yet released mileage estimates for the new hybrids, but if the 25% claim is accurate, drivers can expect 17.5 m.p.g. in the city and 25 on the highway, compared with 14 city and 20 highway for the standard V-8-power models, according to 2008 EPA estimates.

Prius, the most popular hybrid on the market, gets 48 city and 45 highway, according to the EPA, which revised its mileage estimates for 2008 under a new testing system.

Prius remains the only hybrid with a unique appearance that sets it apart as a hybrid car, which analysts say is a large part of its widespread appeal.

"There are still a lot of buyers who say, 'Look at me, guys,' which is one reason for the success of the Prius," said John O'Dell, publisher of the Green Car Guide for Edmunds.com. "Toyota did a marvelous marketing job. It has become the gold standard of what a hybrid is supposed to be."
Drivers still pay a premium -- several thousand extra on some models -- for hybrids, and it can take years to recoup the extra expense through gas savings.

But Toyota is rolling out a less expensive, no-frills model of the Prius priced under $21,000.
One hybrid that goes away for 2008 is the Honda Accord Hybrid, which failed to attract much interest. The Accord was unique in that it offered an electric motor to boost its already powerful V6 engine, making it more of a performance car than a green or economical model.

"What Honda was effectively selling was an electrically supercharged Accord," O'Dell said. "One reason it didn't work out: It was a fairly expensive proposition."

[Via - www.freep.com]

Unique Aptera Hybrid Looks like a Flying Car

This looks like a flying car, but it’s no flight of fancy. Called the Aptera, the wacky machine is about to go into production and is almost as environmentally friendly as a glider – its clever petrol-electric hybrid engine returns an incredible 300mpg!

Despite its eco-friendly credentials, the Aptera can sprint from 0-60mph in 10 seconds and hit 95mph. Inside, there’s room for two adults, a child and luggage. And the interior boasts all the kit you’d expect from its sci-fi looks, with a rear view camera, sat-nav, a hi-tech sound system and even solar-assisted climate control.

The three-wheeler is only available in the US at the moment – although it could be imported here – priced from GBP 14,709. There’s also an all-electric version which costs GBP 13,232. This has similar performance as the hybrid and a range of 120 miles from only a few hours’ charge.

[Via - http://www.autoexpress.co.uk/]