Hybrids not a priority for Honda Australia

HONDA Australia will hold off on adopting its parent company’s plan to increase the number of hybrid and plug-in hybrid models until the technology is more widely accepted and there is sufficient government support to bring costs down.

The car-maker’s Australian arm has had mixed fortunes with hybrid models in recent years and despite offering one of the most comprehensive line-ups of petrol-electric powered offerings, next to Toyota/Lexus, Honda dumped four hybrid models last year due to poor sales.

Last month, Honda Motor Company president and CEO Takahiro Hachigo laid out plans of a corporate restructure and also announced that plug-in hybrid powertrains would be the core of its electrified vehicle program, with at least one variant of all core models to use the technology.

In its long-term plan, Honda aims to have electrified powertrains in two-thirds of all vehicles built by 2030, with plug-ins accounting for half of all sales by the same year. The car-maker has already launched the new-generation Clarity hydrogen fuel-cell model in Japan.

The Jazz and Civic Hybrid, Insight hatch and CR-Z sportscar were all discontinued, and despite launching a flagship $58,990 Accord Sport Hybrid mid-last year, Honda is unlikely to continue with the variant beyond its current life-cycle.

Speaking with journalists in Melbourne last week, Honda Australia director Stephen Collins said hybrid power still has a place for the car-maker in Australia, but that it was a challenge given the low take up.

“In Australia it is important from a leading technology viewpoint but the reality is the hybrid market is less than one per cent of the total market and if you take Camry (hybrid) out of that it is a lot smaller,” he said. “So it is a major challenge. It is tough. We have experienced that toughness as well.

“The NSX will of course have the three-motor hybrid system. Accord Hybrid has been major challenge for us. It still plays a role. Our objective is to bring the latest technology to market, it’s not always going to be volume, but it is not a quarter of Honda Australia business.”

Mr Collins said the Accord Hybrid was “unlikely” to remain in Honda’s Australian line-up in to the future following slow response and buyer indifference, adding that NSX will take its place as a hybrid flagship.

“I think it is unlikely. I think we brought it to the market as a tech leader.

Our volume has been low. We set our volume low and we achieved that goal. I think our flagship hybrid will be NSX and when you get opportunity to drive it you will see why.”

When asked when Honda Australia would adopt the global strategy set out by My Hachigo, Mr Collins said he was unsure and that for the time being the focus would remain on petrol engines.

“The honest answer is I don’t really know. What I do know is the core of our business now and in the foreseeable future in terms of volume is petrol engines, basically.

“How long is it (transitioning to hybrid) going to take? I don’t know. All I know is the hybrid market is not growing in Australia and it’s showing no short-term signs of growing and without government incentives it is unlikely to grow at any sort of rate as it has in Japan.”

Honda Australia general manager of customer and communication Scott McGregor outlined the difficulties car-makers face in offering hybrid-powered models at a competitive price given the higher cost of manufacture.

“The challenge is try and do it at scale,” he said. “I don’t think there is any mainstream manufacturers that have been able to do it at scale with that technology. Holden Volt... everybody has had a crack at it. I think the difficulty is getting something to market that consumers can actually afford.

Mr McGregor said that while buyers are drawn to the technology for its fuel-saving benefits, they are often reluctant to pay more than a regular combustion engine at purchase.

“Consumers will talk about wanting fantastic fuel economy over what they could get from a regular very efficient petrol or diesel engine but when you ask them to pay $5000 or $10,000 for the privilege, that is when it becomes a little harder.

“I think until government regulations are put in place and encourages it, or there is a way manufacturers can provide scale and get a product to market at the right price, I really can’t see it taking off in Australia.”