Hybrid-powered vehicles will move from the fringes of American passenger cars to the mainstream when Honda launches the Civic Hybrid sedan in April.
The Civic Hybrid isn’t the first gasoline-electric vehicle, but it breaks new ground, because, aside from minor styling changes, it looks like any other Civic sedan.
Honda was the first to offer a gasoline-electric hybrid, the Insight, a two-seater with a teardrop shape and minimal cargo room that debuted in December 1999. The small interior and eccentric aerodynamic styling limit the Insight’s appeal, and Honda has sold fewer than 10,000 in the U.S.
Toyota followed with the Prius, a hybrid sedan launched in the U.S. in June 2000. The Prius has unusual styling marked by a sloping hood and short rear end and a dashboard with the gauges in the center.
The Prius also sells in small numbers, 15,556 units in 2001, though Toyota says sales are limited by production capacity in Japan, not demand.
Industry forecaster J.D. Power and Associates predicts that the market for hybrids will grow to half a million vehicles per year in the U.S. by 2006.
Power plans to release a study this week that concludes consumers want to buy hybrid-powered vehicles and are willing to pay more for them than conventional models.
“There are far greater opportunities for hybrid vehicles than many automakers perceive,” said Thad Malesh, who directed Power’s study. Malesh sees the Civic’s conventional styling as “a huge selling point.”
While the Insight and Prius stick out, the Civic Hybrid should blend with traffic. The Civic is the most popular small car in the U.S., and nearly 332,000 were sold last year.
“We believe that hybrid technology is now ready for prime time,” Peter Rech, Honda’s assistant manager for product planning, said at a press introduction in Detroit.
The main lure will be the hybrid powertrain, which uses a small electric motor to boost the acceleration of a 1.3-liter 4-cylinder gasoline engine and improve fuel economy to nearly 50 m.p.g. in combined city and highway driving.
Honda also positions it as the premium Civic model by dressing up the interior, loading it with features and adding sound insulation for a quieter ride.
“We know that the technology triggers some people to buy, and it will probably be the No. 1 reason,” Rech said. “But we’ve made this the most refined and well-equipped model in the Civic family, our top-of-the-line model.”
Honda will price the Civic Hybrid at around $20,000 with the standard 5-speed manual transmission. The only factory option will be a continuously variable automatic that will cost about $1,000.
That would make it more expensive than the Insight, about the same as the Prius and in the range of popular midsize sedans such as the Accord, the best-selling car in the U.S.
The hybrid is equipped like a Civic EX sedan, the most expensive model with a base price of about $17,000, except for a power sunroof (eliminated to improve aerodynamics). In addition to classier upholstery and interior trim, the hybrid has automatic climate control, an instrument cluster that differs from that of other Civics in color and graphics displays replacing some analog gauges, and electric (instead of hydraulic) power steering, features not on the EX.
Honda expects to sell 2,000 per month, a modest goal given Civic’s popularity. Rech says more can be imported from Japan if demand warrants, but he wouldn’t speculate about how much demand exists for hybrid vehicles when gasoline costs less than $1.25 a gallon.
“We’ll see how this goes. We really don’t know what the limit is,” he said.
Honda will lose money on the Civic Hybrid, though the company won’t say how much.
“We view the Civic Hybrid as an investment in the future, an investment we believe will begin paying dividends in the not-too-distant future,” Rech said.
Honda expects to be the first manufacturer to offer a fuel-cell vehicle next year when it makes a hydrogen-powered vehicle available to fleet buyers in California. Honda estimates it will sell 200 to 300 per year initially.
Though Honda won’t say how many hybrid vehicles it expects to sell, Toyota is on record as planning to sell 300,000 per year worldwide by 2005. North America will take a big share because it is Toyota’s largest market.
Toyota General Manager Don Esmond sees greater potential for larger vehicles with hybrid powertrains.
“It’s hard to say how much more demand there is for a hybrid compact car,” Esmond said. “There is probably a much larger market for hybrids in midsize SUVs like the Highlander.”
A hybrid Highlander could be available by 2004.
“The Highlander is a good candidate. The midsize SUV market is where the action is,” spokesman John Hanson said.
“We are very bullish on hybrid technology. Very soon, you will be able to get hybrid technology on most Toyota vehicle lines,” including sedans, car-based sport-utility vehicles and minivans.
In addition to promoting hybrids as green vehicles that get better fuel economy and lower emissions, Toyota plans to tout their performance.
“The next generation of hybrids will supply the emissions and fuel efficiency people are looking for, but it also will be the highest-performance engine in the lineup,” Hanson said.
“We will offer hybrids as the premium engines in the lineup. You will pay a premium for it, but you will be getting the premium engine with some real performance gains.”
Honda and Toyota are ahead of their domestic rivals in introducing hybrid technology.
Ford plans to introduce a gas-electric hybrid version of the Escape SUV next year, and General Motors will offer a gas-electric powertrain on its full-size trucks in 2004.
The Chrysler Group also expects to introduce a hybrid powertrain in 2004, but it has not decided whether it will be on the Dodge Ram pickup, Durango SUV or a minivan.
