Honda Motor Company observes increased sales amidst economic slowdown and rising fuel price

In the middle of sub-prime economic crisis and high fuel price in the USA, Japan’s second largest auto maker Honda Motor Company Limited (TYO: 7267) is observing a consistent rise in its car sales. This is truly a big achievement for the company. In an email to the analysts, the company said that the company’s US sales in the first 20 days of June 2008 was higher than last year. Thanks to its latest models of fuel efficient small vehicles.

The email said that Honda’s total sales in the USA rose by 16% in the first 20 days of June. However, Chris Martin, Honda spokesperson could not confirm the email. Honda is among the top five automakers that has observed increased sales in the USA this year. The $4 per gallon gasoline has forced consumers to buy fuel efficient vehicles. Like other USA automakers, Honda does not depend heavily on large vehicle sales. Truck sales makes up less than 40% of its total vehicle sales. The Sydney Morning Herald reports:

''Honda may raise its profit forecast at the half-year point,'' said Takashi Aoki, who helps manage about 130 billion yen at Mizuho Asset Management. ''It may also increase production capacity for the Civic and Accord.''

Through May, Honda's US sales gained 4.8%, compared with an industry decline of 8.4%, according to Autodata. Last month the Civic was the top-selling vehicle in the US, besting Toyota's Corolla and Camry sedans.

The email further says that Honda civic, Honda Accord and Honda Fit are the top selling models of the company. However, sales of the light truck models are down due to fuel crisis and economic slowdown. The car sales went up by 37%.

According to Detroit based Honda spokesman, Chuck Schifsky, the demand of Honda Civic is so high that the company is facing a very tough time to meet the demands.

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The 2009 Honda FCX Clarity : The hydrogen fuel-cell car from Honda Motor Company Ltd.

Honda Motor Company Ltd. (TYO: 7267) has made a big leap towards developing environment friendly car. The 2009 Honda FCX Clarity is the first fuel-cell car of the world. Honda Motor Company was also the pioneer of gas-electric hybrid. Now, they have brought out the first car that produces nothing but steam. It is truly a car of the future.

Dimension:
Wheelbase. . . . . . . . . .110.2 inches
Length. . . . . . . . . . . . 190.3 inches
Height. . . . . . . . . . . . .57.8 inches
Width. . . . . . . . . . . . . 72.7 inches
Track (front/rear). . . .62.2 / 62.8
Curb Weight. . . . . . . . .3582 lbs.

• The 2009 Honda FCX Clarity is a dynamic full-cabin sedan. Automobile mag says:

The FCX handles like a well-composed family car. But easily distracted drivers might be mesmerized by the multi-color power meter gauge in the center of the dashboard, especially a ball that grows alarmingly and changes color as fuel mileage dwindles. (Note to self: See if mashing the throttle down long enough will cause the ball - and the car - to self-destruct to prevent further environmental irresponsibility.) Driven properly, the FCX is expected to deliver the equivalent of 68 mpg and zero tailpipe emissions.

• The front end of the 2009 Honda FCX Clarity comes with a 6-sided grille.
  

• The 2009 Honda FCX Clarity comes in a sophisticated rich color called Star Garnet Metallic.
  

• The hood, trunk, doors and fenders of the 2009 Honda FCX Clarity are made of aluminum.
  

• The wheels of 2009 Honda FCX Clarity have ultra-lightweight 5-spoke forged aluminum.
  

• The front and rear sub frames of 2009 Honda FCX Clarity are made from extruded aluminum.
  

• A significant portion of the seating material of the 2009 Honda FCX Clarity comes from plants.
  

• The 2009 Honda FCX Clarity seat covers are made of environment friendly Honda bio-fabric. Conventional polyester are made from petroleum but Honda bio-fabric provides a CO2 reduction of 30% compared to polyester. The bio-fabric is highly elastic and very silky, durable and soft to the touch.
  

• The seats of the 2009 Honda FCX Clarity are individually contoured to complement human form. The seats also have heating and cooling facility. There is also a rear center console which serves as tray table.
  

• The 2009 Honda FCX Clarity comes with front and rear door pockets to stash you stuff.
  

• The 2009 Honda FCX Clarity comes with Satellite Linked Navigation System with voice recognition and rearview camera. It is not available in all the FCX Clarity powertrain. The navigation system is available in the USA; except Alaska.
  

• The 2009 Honda FCX Clarity comes with XM® Radio and MP3/auxiliary input jack in the center console. Honda official website says:

Required XM® Radio monthly subscription sold separately after 90-day trial period. Installation costs and other fees and taxes may apply after initial trial period, including a one-time activation fee. Subscription fee is consumer only. All fees and programming subject to change. Subscriptions subject to Customer Agreement available at xmradio.com. XM service only available in the United States except Alaska. The XM name is a registered trademark of XM Satellite Radio Inc.”

• The 2009 Honda FCX Clarity comes with a multi-layered instrument panel. The hydrogen-consumption gauge changes color and size to show the level of your hydrogen consumption as driving conditions change. During high consumption the ball becomes large and amber colored. In case of low consumption, it shrinks and turns yellow then blue.
  

• The 2009 Honda FCX Clarity comes with USB audio interface. Honda official website says:

The USB Audio Interface is used for direct connection to and control of some current digital audio players and other USB devices that contain MP3, WMA, or AAC music files. Some USB devices with security software and digital rights-protected files may not work. Please see your dealer for details on compatibility.

Performance:

• Honda has given equal emphasis on performance of the 2009 Honda FCX Clarity. Motor Trend says:

the Clarity's fuel-cell stack is located under the driver's right arm, is 65 percent smaller by volume, packs 17 percent more power (100 kW or 136 horses), and it can start at temperatures as low as -22 degrees F (owed to its vertical, gravity-drain water path). Combined with its co-axial and compact motor/gearbox up front, lithium battery pack under the rear seat, and single, 5000psi storage tank behind the rear passengers, the Clarity is brilliantly laid out. Interior space is generous, particularly its rear passenger legroom, and trunk volume is commendable.

• The 2009 Honda FCX Clarity is powered by both fuel cell and electric motor. Alternative fuels.about.com says:

The fuel cell stack works in conjunction with an electric motor that spins up to 12,500 rpm, and is bundled into a single unit with the gearbox. Regenerative braking charges up advanced lithium ion batteries which power the electric motor, and the system works together to produce a total of 134 horsepower and 189 ft-lbs of torque. The FCX Clarity achieves the hydrogen equivalent of 68 mpg combined, with a total cruising range of 270 miles, and its only emissions are water vapor.

• One of the great features of the 2009 Honda FCX Clarity is that you do not need any keys to start the vehicle. All you have to do is just push the start button. Business Weeksays:

Step on the throttle and you're likely to be surprised by the Clarity's aggressive launch. The system produces 100 kilowatts of power, with a modest additional assist from the onboard batteries, which operate much like those in today's gas-electric hybrids. ……From 0 to 30 mph, the FCX delivers some serious acceleration. It slacks off as you approach highway speed, but that doesn't mean it's a slouch. We were able to easily merge onto the congested I-10, in Santa Monica , and quickly soared to near 90 mph. Certainly, around town, the FCX Clarity will keep up with traffic.

Safety features:

• The 2009 Honda FCX Clarity comes with Six airbags.
  

• The 2009 Honda FCX Clarity has anti-lock braking system (ABS).
  

• The 2009 Honda FCX Clarity has Even Vehicle Stability Assist.
  

• The 2009 Honda FCX Clarity has Electronic Brake Distribution (EBD) systems.
  

• The 2009 Honda FCX Clarity passed all the tests required by U.S. safety standards.
  

• The 2009 Honda FCX Clarity comes with omni-directional crash protection system to protect the hydrogen and electrical devices inside the car in times of crash.
  

• The 2009 Honda FCX Clarity comes with Honda’s newly improved Collision Mitigation Braking System (CMBS). Introduced in 2003, CMBS can detect potential collisions. In case of unavoidable collision, front seat belts automatically retract and braking force reduces the vehicle's speed.

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The FCX Clarity : First zero-emission vehicle from Honda Motor Co. Ltd.

The FCX Clarity is the new zero-emission car from Honda Motor Co. Ltd. (TYO: 7267). On June 16 2008, the first batch of FCX Clarity rolled out of the production line and is heading for Southern California. Honda unveiled the FCX Clarity in November 2007. After revealing the car, the company received 50,000 emails inquiring about the FCX Clarity. Many of you now know Toyota Motor Corporation (TYO: 7203) as the hybrid pioneer but it was Honda that first brought out hybrid cars. Unfortunately, Toyota Motor Corporation took over Honda. Now, Honda is preparing to give Toyota Prius a run for its money. After releasing the FCX Clarity, Honda Motor Corporation will become the top player in the green auto industry.

Here are some of the information I have collected about the FCX Clarity:

• Honda is now claiming that it is the first company to have a certified hydrogen car for commercial use by the U.S. Environmental Protection Agency.

• The FCX Clarity is a roomy four door sedan. In terms of performance, the FCX Clarity has a smooth ride and easy to handle.

• The FCX Clarity runs on hydrogen and electricity. The car does not emit any Carbon but steam.

• According to Honda, the FCX Clarity is two times more energy efficient than gas-electric hybrid and three times than a standard gasoline-powered car.

• The first FCX model was unveiled as a concept vehicle at the 2005 Tokyo Motor Show. Compared to FCX, the FCX Clarity uses 75% fewer parts. It took Honda Motor Company 19 years to develop the car. Fool.com says:

The hydrogen fuel cell is hardly new. It's been around since 1839! The principal challenges to its widespread application in vehicles have related to the fuel itself: the need for an entire fueling infrastructure, the cost of creating and distributing the hydrogen fuel, and the energy (often from natural gas) required to produce the fuel.

• The FCX Clarity is powered by a newly designed fuel cell stack. The new fuel cell stack has allowed Honda’s engineers to lighten the body, expand the interior and increase efficiency.
  

• The fuel cell generates energy through chemical reaction between hydrogen gas and oxygen in the air. A lithium-ion battery provides supplemental power.
  

• The FCX Clarity can go “270-miles per tank with hydrogen consumption equivalent to 74 miles per gallon, according to the carmaker.” (280 miles according to Business Week)
  

• The FCX Clarity weighs 3,600-pound.
  

• The FCX Clarity can reach speeds up to 100 miles per hour.
  

• The FCX Clarity can go from 0-60mph in around nine seconds.
  

• The FCX Clarity is still at experimentation stage. Honda will just lease 200 FCX Clarity in the next three years. The potential customers will have to be residents of Santa Monica, Torrance or Irvine, and California. The reason, these areas contain Hydrogen fuel stations. The person who would lease the car for three years will have to pay $600 per month including maintenance and collision coverage. The leasing process will start from July. Out of the 200 cars, 50 will be leased in Japan and 150 the USA. In Japan, the car will be launched in fall. C Net says:

Starting in July, Honda plans to offer the hydrogen-powered FCX Clarity through a lease program at three dealerships in California: Power Honda Costa Mesa, Honda of Santa Monica, and Scott Robinson Honda in Torrance. Honda also plans to make the cars available in Japan. The cars will be leased on a three-year basis for about $600 per month, according to Honda.

Lucky first customers:
The FCX Clarity has already started a big buzz in Hollywood. The lucky first customers of the car are:

• Actress Jamie Lee Curtis and filmmaker husband Christopher Guest.
• Actress Laura Harris.
• Film producer Ron Yerxa
• Southland Industries CFO Jon Spallino
• Jim Salomon (businessman)
  

Launching ceremony at Japan:

On June 16^th, Honda held a launching ceremony of the FCX Clarity, at the Tochigi prefecture. News reporters who joined the ceremony were allowed test drives of the FCX Clarity which was followed by a presentation and tour of the factory. Actress Laura Harris and producer Ron Yerza attended the event and cheerfully communicated with the reporters.

Interview of Takeo Fukui:
Famous American business magazine, Wall Street Journal, had an interview with Takeo Fukui, President and CEO of Honda Motor Company. Fukui shares his thoughts, ideas about fuel-cell vehicles and Hondas and future plans of Honda. Here is an excerpt of the interview:

WSJ: Why is Honda introducing fuel-cell vehicles when there is no infrastructure yet to support them?
Mr. Fukui: About 100 years ago, when Ford's Model T came out, that kicked off the development of the auto industry. If you ask, 'Were there any gas stations back then?' there weren't. In the car industry, cars should come first and then infrastructure will follow.

WSJ: So how many years away are we from having hydrogen refueling stations for fuel-cell vehicles?
Mr. Fukui: That's not going to happen really quickly. It's happening in California, and may eventually happen in several other states, and also Japan and Europe. We are working on the technology where we can charge hydrogen into fuel-cell vehicles at homes. So probably in the next 10 years we will get some level of infrastructure in place.

When asked about developing electric vehicles Mr. Fukui said that the practical feasibility of electric vehicle is very limited and the biggest issue is driving distance. Charging time is also another major issue. Where an electric vehicle takes several hours to charge a fuel-cell vehicle takes only one minute. Electric vehicles have restricted applications like golf carts.

Obstacles and debates:

• Lack of large number of hydrogen filling stations is a big problem for the FCX Clarity.
  
• Another major debate over hydrogen is whether it is truly energy efficient. It requires large amount of electricity to produce hydrogen.
  

Price of FCX Clarity:
Another major obstacle for the FCX Clarity is the price. Though Toyota Prius is now the most fuel efficient car in the USA, it comes with a hefty price tag. As a result, many analysts are saying that Prius is not the ultimate money saver.

Takeo Fukui, President and CEO, Honda Motor Company said that the new FCX Clarity will cost tens of millions of yen but its previous models cost higher; hundred million yen. To introduce the car into the mass-market, price need to go below 10 million yen or $92000. Mr. Fukui said that it would take another ten years for the company to make the car widely available to every one. To cut the price, Honda should reduce the use of expensive metals and work on producing cheap hydrogen fuel tank.

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Honda is scoring big times in the USA auto market

With the high fuel price, America has become an open field for small fuel efficient cars and Honda has become the big player in this field. The small cars of Honda are now selling very quickly all over the USA. Instead of going for big cars and better performing engines Honda Motor Company Limited (TYO: 7267) focused on its small subcompact cars. Now Honda has got the best performance in the USA auto market. It sales grew up 4.8%. In May, Honda Civic became the top selling vehicle in the USA displacing Ford’s F-Series trucks. According to Jim Hossack, consultant, Auto Pacific Inc. Honda’s products are well tuned with the condition of the current market. They are not offering Super Duty or Suburban but small fuel-efficient vehicles. Det News.com reports:

Honda could sell even more vehicles in the United States if the Japanese automaker shipped more small cars to its American Honda Motor subsidiary. Fit subcompacts are sold within five days of reaching showrooms, said John Mendel, executive vice president at American Honda. But Honda is also scrambling to meet demand in Japan, where the Fit is the best-selling vehicle. "Sixty percent of the world market is small cars. We compete with the rest of the world for the Fit," Mendel said. It gets 27-28 miles per gallon in the city and 33-34 mpg on the highway.

Sales of Honda’s Fit subcompact has increased 64%, Civic 20.5% and Civic hybrid 17.5%. Honda may be doing well in its small vehicles section but its bigger vehicles are not performing well. Though cross over CR-V are quite popular but still, Honda is having a tough time selling its big vehicles. Honda’s midsize Ridgeline pickup, premium Acura are slow sellers but overall Honda cars do not spend much time in dealers lots in the USA now days.

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Honda and Toyota beats Ford in the May USA car sales

After General Motors Corporation (NYSE:GM), it’s Ford’s term. The second largest car maker in the USA took a big blow in May car sales from Japanese auto-giants: Honda and Toyota. As the USA consumers are switching toward fuel efficient Japanese cars, Honda Motor Company’s (TYO: 7267) Civic Accord and Toyota Motor Corporation’s (TYO: 7203) Corolla and Camry enjoyed higher sales to Ford Motor Company’s (NYSE:F) F-Series pickups. According to Honda spokesperson Chris Martin, in May, Honda sold 53,229 Civics and 43,778 Accords. Toyota on the other hand sold 52,826 Corollas and 51,291 Camrys. Bloomberg reports:

The second-largest U.S.-based automaker sold more Focus small cars than F-Series pickups to individual consumers, Farley also said. Those so-called retail sales usually are more profitable than those to business and government fleets that get discounts for buying in bulk.

The F-Series still beat the Focus in total sales because of fleet purchases. Ford sold 32,579 Focus cars last month, an increase of 53 percent from a year earlier, while the F-Series total was a 31 percent drop. Ford's total sales fell 16 percent last month, its sixth straight monthly decline.

Declining pickup sales contributed to Ford's announcement last month that it would abandon a target of returning to profit by next year. The company had combined losses of $15.3 billion in 2006 and 2007, mostly because of its North American unit.

For the first time in last fifteen years, any foreign auto maker topped Ford in car sales. For the first time also, Honda’s Civic has become the best-selling car in the USA. According to Ford’s marketing chief, Jim Farley, it was a watershed month. The people of USA are paying $4.20 gas for the first time.

The main problem is USA car makers are good at making heavy vehicles that take lots of fuel. Success of Japanese car makers is a big sign of change for the USA car industry. From now on, they should go for producing small fuel efficient cars to survive in the extremely competitive auto market.

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Honda president Takeo Fukui is aiming for F-1 championship

Honda, the second largest Japanese automaker is pioneer in many things. The company first introduced hybrid vehicle in the USA. Honda is also the first Japanese automaker to enter into F-1 racing. Unfortunately, the company has not been able to win any title and this is killing Honda Motor Company’s present President and CEO Takeo Fukui. Now, he is eyeing to win one F-1 championship and he announced to spend $10billion to win a F-1 championship. International Herald Tribune reports:

Toyota, Japan's largest automaker, beat Honda to the hybrid market by two years with the Prius in 1997. The vastly improved second-generation Prius in 2003 became an instant hit, helping Toyota win a reputation overnight as the leader in green automotive technology.

Honda's own efforts have been stop-and-go. After introducing the Insight two-seater in 1999, the company discontinued sales of two underpowered hybrid models, leaving the gasoline-electric Civic and hybrid sales at a fraction of Toyota's.

Honda, No. 2 in the Japanese market, recently detailed plans to change that. Using technological advances that would make its hybrid system less expensive and more profitable, Honda plans to introduce three hybrid cars over the next few years.

With gasoline prices soaring, Honda hopes to sell about 500,000 hybrids a year by 2015 - nine times what it sold last year - rivaling Toyota's own goal of increasing hybrid sales to a tenth of its total sales after 2010.

Sixty three year old Takeo Fukui, a resident of Tokyo had been an amateur race car driver. He joined Honda Motor Co. (TYO: 7267) because it was first Japanese company to participate in F-1 racing. Under Fukui’s leadership, Honda saw a major increase in its car sales and last year the company made a profit of $5.8billion.

No doubt, Takeo Fukui is a great business leader but will he be able to make Honda an F-1 champion? What do you think?

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Ford, GM, Chrysler are losing market to Honda and Toyota

Honda Motor Company (TYO: 7267) is trying to make a turn around with its hybrid models and this means more loss of market shares for American automakers especially, the famous ‘Detroit Three.’ In 2009, Honda Motor Company is planning to release hybrid models that will cost only$1900 (€1,206). Honda is also planning to bring out the hybrid version of its popular Fit subcompact vehicle. Jesse Toprak, chief industry analyst, Edmunds.com referred Honda’s strategy as a ‘game-changer for the short term’. Currently, Honda has the most fuel-efficient car models in the USA market. The company will sell its new hybrid only cars in USA, Japan, and Europe from next year but it has not determined anything about the Fit subcompact hybrid. International Herald Tribune reports:

In addition to the new model and the Fit, Honda will introduce several other hybrids: a Civic and a new sporty model based on the CR-Z, Fukui said.

Fukui refused to give the price for the new hybrid-only vehicle.

But he said the difference between hybrids and their comparable standard models should be kept within 200,000 yen ($1,900, €1,206), although such price gaps can now reach as much as 500,000 yen ($4,800, €3,047).

"The 200,000 yen difference is a must," Fukui said.

Hybrids deliver a cleaner, more efficient ride by switching between a gas engine and an electric motor at different speeds, and by recycling the energy the car produces as it moves.

Honda aims at selling 200,000 ‘entry-level’ hybrid cars every year. To make the cars cheaper, the company has introduced a new electronic control unit and thinner and more compact battery. It is also developing a thinner motor.

North American car companies are good at making big vehicles like trucks and SUVs. With the rising cost of fuel American people are shifting towards smaller fuel-efficient cars.

Michael Robinet, vice president, Global Forecast Services for CSM Worldwide, an auto industry consulting company in Northville, says that GM and Ford could rely on their European and Asian operations for small car expertise. Chrysler has joined with Nissan to release small cars by 2010. GM is focusing on its larger hybrid vehicles and plug-in car Chevrolet Volt which will be released in 2010. Ford is planning to release midsize hybrids next year.

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Honda is going to lease 200 FCX Clarity in Japan and the USA

It was the pioneer in hybrid vehicles; once again, it is going to be the pioneer in fuel-cell vehicles. Japan’s second largest auto-maker, Honda Motor Company Limited (TYO: 7267) is going to sell fuel cell cars and with that aim in mind, the company is planning to lease out 200 fuel-cell vehicles for the next three years. The vehicle named FCX Clarity will go into production from next month in Japan. Leasing will start from July in Los Angeles. After the Clarity was unveiled in November, the company received 50,000 mails inquiring about the car. The first customer of the car will be announced next month. With rising air pollution and oil price and strict emission standards, demands for hybrids, plug-ins, and fuel-cell vehicles will be high. The main problem is the high production cost of the fuel-cell vehicles. Bloomberg reports:

``Honda designed an attractive product, but we're talking about a vehicle priced like a Bentley,'' said K.G. Duleep, managing director of Arlington, Virginia-based Energy & Environmental Analysis Inc. ``The economics of fuel cells are way out of line. Batteries look like a better option because costs should come down more quickly.''

Honda engineers estimated three years ago that its previous fuel-cell cars cost more than $1 million to build. Duleep, who completed a fuel-cell vehicle study this year for the U.S. Department of Energy, believes Honda has cut its production costs to between $120,000 and $140,000 per vehicle.

Luxury cars from Bentley Motors, owned by Volkswagen AG, range from $170,990 to $340,990, according to Edmunds.com.

``We have made substantial cost reductions throughout the vehicle,'' said Sage Marie, a spokesman for the company's U.S. unit, who didn't confirm Duleep's estimate. The Clarity performs more like a sports car, with a top speed of 105 miles per hour, and should be viewed as a more premium vehicle, he said.

Honda will lease those 200 cars both in Japan and the USA but it did not mention how many of the 200 cars will be leased in USA. In the USA, the potential customers of the FSX Clarity have to be residents of Santa Monica, Torrance or Irvine, California and he/she will have to pay $600 per month. Since the state of California has hydrogen fuelling stations and Honda’s US operation base is situated over there, it will release the fuel-cell cars in that area.

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Honda opening up a new plant

On Wednesday, Honda president, Takeo Fukui announced to invest $1.5 billion to build a new car production and engine plant. Currently, Honda Motor Company Limited (TYO: 7267) has two car production plants; one in Tokyo in Saitama and the other in Western Japan. The 200,000 upa engine production facility will be constructed in Ogawa. The first unit will come off in 2009. Automotive World report:

In related news, president Fukui confirmed provisional plans announced in March that a subsidiary of the OEM that specialises in mini-vehicles, Yachiyo Industry Company, will construct a second plant that will be subcontracted to make engines and related components. This is due to become operational in 2010.

"Over the next three years Honda will start running next-generation production lines at four sites, including a transmission factory in the central prefecture of Shizuoka which will be renovated, to beef up competitiveness. This will be the biggest production reform in Honda's history," Takeo Fukui told a news conference.

USA is the largest market of the Japanese car makers. As the country is observing an economic slow down, Honda has no plans to cut down its production at its North American Honda and Acura plants. To keep the plants operational, Honda will export cars to Russia. The company will also work hard to gain a better result in its domestic market despite the fact that auto makers are observing a slump in car sell.

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Honda decides to buy more foreign made auto parts

To make its products more competitive in the market and reduce the production cost, Honda Motor Company Limited (TYO: 7267) Japan’s second largest automaker, announced that it will buy auto parts from abroad. On Wednesday, Honda also declared to reform its manufacturing processes to boost efficiencies. The new production standards and procedures will be introduced at the company’s Yorii car plant which is now under construction. Reuters reports:

"The issue is how much of the rest of the components, which account for 80 percent of the total, we can procure globally," he said in a group interview. That would include components made overseas by Japanese parts makers as well as those made by local firms, he said.

"For motorcycles, the (parts) infrastructure is in place in Thailand, China, Vietnam and many other places, so we're able to do this. Achieving the same with cars is going to be key."

The company raised the portion of foreign auto-parts from 5% to 17% for its Fit subcompact car. Honda's president, Takeo Fukui said that they were supplying technology to their joint venture partners in China. Another Japanese automaker, Nissan Motor Company (TYO: 7201) is also bringing in parts made from China, India.

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Honda goes hybrid once again

Even I used to think that Toyota Motor Corporation (TYO: 7203) is the pioneer in hybrid vehicles but that is not true; it is the second largest Japanese automobile producer, Honda Motor Company Limited (TYO: 7267), who first introduced hybrid car in the USA. In 1999, Honda rolled out its first hybrid model, the Honda Insight but it was not very successful. Now, looking at Toyota’s success, the company is gearing up again with new hybrid models. On May 21, Honda CEO Takeo Fukui told reporters that by 2010, Honda is planning to sell 500,000 hybrid cars per year. Honda is planning to bring out the Hybrid version of its popular Fit Subcompact. Business Week reports:

First up will be Honda's long-awaited dedicated hybrid car. Seating five, it will be a five-door model with an exterior design based on Honda's sleek FCX Clarity fuel-cell car, which it plans to begin leasing later this year in the U.S. and Japan.

The new car will go on sale in early 2009 and will use a traditional gasoline engine as its main power source, tapping an electric motor during startup and acceleration. It will be launched in Japan, North America, and Europe at an "affordable price," which Fukui says means customers will be thinking about more than just image when they make their buying decision. "This hybrid vehicle will be chosen rationally by customers based on its economic benefit," he says. Annual production is scheduled to be 200,000 vehicles a year, around half of which will be sold in the U.S.

The five-door model will be followed by a sporty hybrid and a new version of the popular Civic hybrid in 2010.

The main problem is, though Honda is optimistic to compete with Toyota, Toyota Motor Corporation is in far better position than Honda dominating majority of North American Hybrid market. At this point, the other option for Honda is going for electric plug-in vehicles like Nissan but Honda is not interested in electronic vehicles. According to Fukui, the major drawback of the electric vehicles is the low powered battery. Unless there is some major technological advancement in the battery, the plug-in cars will not be much popular.

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Toyota introduces to new minivans, the Alphard and the Vellfire, in Japan

In order to cope with the lower car sales in Japan, the country's largest car company, Toyota Motor Corporation (TYO:7203), has introduced to new minivans in Japan. This year, the company observed a sales drop of 2.4% in Japan. The two minivans-Alphard and the Vellfire, will cost the same; between 3 million ($29,000)-4.5 million yen. The Alphard was first introduced in 2002 and it has been revamped for the first time. With these two models Toyota is going to compete with Elysion of Honda Motor Company Limited (TYO:7267) and Elgrand of Nissan Motor Company Limited (TYO:7201). Toyota is expecting to sell 3000 units per month. Bloomberg reports:

Toyota needs to spur sales in Japan with new models as the market has one of the shortest model cycles of any country, according to analysts. Including the revamped Crown sedan in February, the Toyota City, Japan-based company has introduced three new models domestically so far this year.

The company plans to raise domestic sales 0.6 percent to 1.6 million vehicles this year, it said in December. Toyota's sales in the country, which accounts for about 19 percent of the carmaker's total sales, rose for the first time in five months in April.

Last week, Toyota announced a drop in its net income for the first time in nine years in the USA, the largest and most profitable market of Toyota. The company is planning more cost cuts to balance the higher raw material prices.

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