As described in the article and in Honda's 3 year plan you do get a sense that Honda is decreasing emphasis on the high-efficiency hybrid platform, and increasing emphasis on getting as much efficiency in all of their engines/models by whatever means possible, including VCM, FI, low friction, and valve timing. Honda is probably thinking that it can get better fuel economy for more of its fleet at a cheaper price by improving on existing ICE technologies instead of concentrating on future "niche" models like the Insight. Honda will also be able to pass those savings down to future buyers who won't have a large premium or any premium at all for increased fuel efficiency.

But I would not count Honda out of the high-efficiency hybrid market until we know the specs of the 2006 Civic Hybrid. Unless the goal of the next HCH is totally different than the current HCH (horsepower #1 instead of efficiency) or the "3 stage IMA" is just marketing hype, the next HCH should prove to be significantly more efficient than the current gen.