Very interesting perspective from Honda CEO Takeo Fukei

1. Honda will launch a hybrid-only family of vehicles (no big surprise here)
2. Honda currently does not make money on hybrids (surprise to some, but tracks logically)
3. Honda doesn't think plug-ins (including Volt) make sense (shocking <bad pun>)
4. Honda sees future for fuel cell vehicles within 10 years

Honda's position on plug-ins is based on belief that people don't want a vehicle that has to be connected to the grid on a daily basis.

Any-who......here's the link http://www.autonews.com/apps/pbcs.dl...310230004/1171


Honda sees big hybrid volume push with next model
Reuters
October 23, 2007 - 6:50 am ET CLICK BELOW FOR MORE:

>> 2007 Tokyo Motor Show


TOKYO (Reuters) - Honda Motor Co. will start churning out gasoline-electric hybrid cars in large volumes in earnest with a hybrid-only family car planned for a 2009 launch, CEO Takeo Fukui said today.

Japan's second-biggest automaker ranks a distant second behind Toyota Motor Corp. in the hybrid market, now selling only the Civic hybrid after discontinuing production of the Insight two-seater and gasoline-electric Accord.

"Right now, the Civic hybrid is pretty much hand-made," Fukui told an industry conference ahead of the Tokyo Motor Show.

"We don't have much of a desire to expand volumes under these circumstances," he said, citing the high cost of producing the fuel-sipping vehicles.

Honda, which launched its first hybrid, the Insight, in 1999 -- beating Toyota to the U.S. market -- has admitted to making no money on sales of hybrid cars, which add a pricey electric motor and battery to capture energy while driving.

But Honda is working on lowering production costs, promising a hybrid that would have a premium of up to 200,000 yen ($1,750) for consumers over a similarly sized gasoline-engine car -- a difference that Fukui said would be low enough to be made up for in lower running costs.

With the cheaper hybrid system, Fukui said twinning it with a diesel engine for further fuel savings was a possibility if gasoline prices continued to rise.

But he was skeptical about up-and-coming plug-in hybrids, or a hybrid car that can be recharged through an electric socket, saying it would require heavy batteries being loaded on the vehicle.

"I'm not sure what kind of real advantages they would have," he said.

General Motors has been notably keen on the powertrain, aiming to begin production in 2010.

Fukui said Honda had more faith in zero-emission fuel-cell vehicles, which run on hydrogen fuel, for the future.

"I think in 10 years' time, we will have come much, much closer to mass-volume production," he said.


Peace,

Martin

 

Thanks for the article. Something I heard on C-SPAN the other day was a claim that the "The Partnership for a New Generation of Vehicles" was the impetus for the Japanese hybrid programs. They were terrified that we knew something they didn't and decided to fund their own R&D programs. In the meanwhile, some of the 'partners' worked on political programs that crushed the Partnership. Then a funny thing happened: Toyota sold boatloads of Prius to folks standing in line who paid the extra $2-4,000, not counting the tax credit, and some suddenly realized, "There is a market for these things!"

Regardless, it looks like hybrid technology is being pursued seriously and the only folks who haven't "gotten the memo" . . . well they weren't at the leading edge before either. But I won't claim hybrids have become the universal answer, yet.

Honda has verified that a hybrid has to be practical, by discontinuing the Insight, and workable, by discontinuing the Accord. I wasn't aware that their Civic was "hand crafted" and still a loss leader. However, it sounds like Honda has decided to move from image to a stronger, hybrid architecture.

As for hydrogen, I remain quite comfortable with my skepticism. I know too much chemistry to believe H(2) will ever be practical. When laptop batteries become fuel cells, I'll change my mind but until then, fuel cells remain the stuff of science.

Bob Wilson

 

I think we needd to add a tiny little more depth to this analysis.

Honda has comfirmed that it is technically NOT losing money on the Civic Hybrid since its re-design in 2006. However they also made it clear that even at 38,000 units per year production capacity, they would barely break even as well.
So, in comparision to all the other models and parts that Honda produces at the Suzuka plant, the HCH-II is still a comparitive financial burden (Opportunity cost perspective) since it does not produce the profit other models would in its place... And that is barely sustainable for a model year run of 5 years.

Cheers;

MSantos

 

IMO Honda is showing the same colors as most of the manufacturers have the last 10 years where Hybrids and PHEV autos are concerned. Hybrids and PHEVs have fewer moving/more durable parts so they won't make money repairing them and they will generally stay on the road longer so they won't make as much selling them over time. That is why Takei sees no future in them. The heavy battery line is a short term but convenient excuse.

 

Also, Honda would sell more of hybrids if the spent any money at all marketing them. I have seen little to know advertising of their hybrid offerings.

 

It makes absolutely no sense for Honda to advertise the HCH-II beyond what it already does. In many markets around the world, they're are selling every single HCH they make with 1-3 month long waiting lists.

Why create more demand through additional advsertising expenditure when the production capacity is not there?

Also, why would they enhance or expand the vehicle production capacity if the NiMH pack supply/allocation is constrained and limited?

Unlike Toyota, Honda does not have a major share in Panasonic and hence can only get so many units in addition to the "cherry picked" yields it already obtains from Sanyo (that ALSO have to be shared with Ford).

Again, I should caution you that the battery factor although critical and often overlooked by many folks, it is still not the only one !

Cheers;

MSantos

 

Takei mentioned the batteries being heavy. His words, not mine. Besides, 5 years is plenty long enough to solve most parts supply problems if there is a will to do it. Sorry, but I also don't agree about the general supply issue. Toyota had a 3 year Prius II production problem and solved it by building more manufacturing capacity. I am still convinced Honda just doesn't want to build them for the reasons I outlined in my earlier post.

 

Hi,

When I was first shopping for a hybrid, I saw two on the lot in Huntsville but that was the late spring or early summer of 2005. I'm glad to hear they are moving briskly!

The Civic is dandy car, although a little too low to the ground for our older-aged family (wife has severe back and knee problems.)

LOOKING FORWARD TO THE NEW MODEL!

Bob Wilson

 

I just cannot understand where that impression comes from. In today's world a hybrid is an ICE PLUS additional motor(s) and batteries and electronics to manage the whole scheme. I'm over-simplifying, but the detail really adds nothing to the point. The motor(s) by definition have moving parts. How can a hybrid have FEWER moving parts than a comparable non-hybrid?

The other thing I would take issue with is the idea that Honda or any other CAR COMPANY makes money by REPAIRING automobiles. Repairs that occur during the warranty period cost the car companies money. Repairs that happen post warranty do not have to be repaired by the dealer. They can be repaired by a third party repair shop. Those that are repaired by the dealer provide profit opportunities for the INDEPENDENTLY OWNED DEALER, not the CAR COMPANY. Honda, or any other car maker for that matter, has NOTHING to gain by intentionally producing less reliable product. They have a heck of a lot more to lose.

Peace,

Martin

 

Hold the phone a second MartinJLM. Planetary transmissions have app. 1/3 the moving parts of a "normal" transmission and the engine gets used substantially less for the same miles, unless maybe Al Gore's boy is driving it. This translates to fewer repairs doesn't it? Anyway, I believe the Prius and Civic hybrids repair records will bear this out. I have thought Toyota should go to a maintenance schedule similar to aircraft engines and use hours of operation for service interval determinations, rather than miles.

As for the repairs - if you build a new car from the parts house it costs about 5 times the pre-assembled cost. Somebody's making money on that and the manufacturer has to attract and keep dealers. Repair income is certainly a piece of that because they sell the replacement parts. Takei is showing indirect support to his selling force since they also repair the vehicles (and make money doing it). I don't know about any other dealers but here in Texas most Toyota dealers are subsidiaries of Gulf States Toyota. They are not owned by Toyota (unlike most of the rest of the country), but surely they make a significant amount of revenue off of parts and repairs too. My bet is that internally Toyota is telling its dealers "you have 5 years to get ready for less income from parts/repairs", as they plan hybrid versions of all offerings.

Finally, the point is that hybrids and PHEVs are inherently more reliable, not that any manufacturer would make a car less reliable to make money. The repair money comes from the inputed difference between the two. If I had a dealership I would not like losing revenue and/or profit no matter what the cause, so I don't blame them for not liking it. I just don't agree with them - I think the money should stay in my pocket. And with my Prius it has so far.