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Honda Insight into the mainstream

Contender: The hybrid Honda Insight will target the premium hatchback market if exchange rates are favourable.

Honda hopes a rising Aussie dollar will help Insight hybrid become its Civic hatch

8 Apr 2009

HONDA hopes to chase mainstream sales volumes with the all-new Insight hybrid by pricing it around $30,000 when it arrives in Australia early next year, thanks to favourable recent exchange rate movements.

And the company is banking on an even stronger Australian dollar recovery against the Japanese yen over the next few months as it works towards pricing the Insight hybrid well below the price of the recently unveiled Civic Hatch.

The latter stunned observers this month with its $38,990 base price tag – the result of unfavourable UK pound exchange movements and costly Australian Design Rules (ADR) implementation.

If Honda succeeds in achieving a low price for Insight, it will pitch the hybrid against up-spec versions of popular mainstream small cars such as the Mazda3, Toyota Corolla and Mitsubishi Lancer, as well as the European diesel brigade led by the Volkswagen Golf, Peugeot 308 and Citroen C4.

Of course, the Insight will then also significantly undercut the next-generation Toyota Prius hybrid due in the third quarter of this year.

Last week, Toyota in Japan reportedly more than halved the sizeable price gap between the latest Prius and Insight, from ¥2.33 million ($A32,100) to ¥2.05 million (A$28,200) for the entry-level version of the all-new third-generation model, after the Honda almost quadrupled its expected first-month sales tally.

In Japan, Honda has set the Insight’s price from ¥1.89 million (about $A26,000).

Keen on replicating this formula, Honda Australia has high hopes for its upcoming hybrid.

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“The most important new model in Honda’s future is the second-generation Insight,” said Honda Australia managing director and CEO Yasuhide Mizuno (pictured left).

“The reaction was very positive and we are excited about this car’s potential in the Australian market.

“The Insight has already been very successful in Japan, with more than 18,000 orders placed in just four weeks from its launch in early February.

“In fact, the Insight was Japan’s top-selling hybrid in February, outselling the Toyota Prius.” Honda Australia senior director Lindsay Smalley said he was counting on a stronger Australian currency over the next year.

“The Insight we want as mainstream volume,” he said.

“Price-wise, it has been released in Japan at about ¥20 million. Now, assuming similar specs, multiply the exchange rate plus duty plus freight etcetera … and an exchange rate at 57 Yen, we are talking about a $40,000 car.

“At ¥70, we are probably talking about a $30,000 car. So the exchange rate will determine the price of this car.

“Every other importer is facing the same issue. So if this comes in at $40,000, equivalent product out of Japan would have to come in at $40,000-plus.

“The fundamental difference between the Honda Insight hybrid system (and other implementations) is that it is an elegantly simple solution … which should help keep us price competitive.” Mr Smalley said the Insight would be joined by a variety of other hybrid models such as the CR-Z concept-based sporty model, but that it would not be the cheapest hybrid in Honda’s model line-up for long.

“Hybrid is our direction, and Jazz Hybrid will eventually come to this country too,” he said.

Honda believes Australians are now ready to embrace the hybrid en-masse as an environmental statement.

“I completely believe the Insight will be the mainstream model for Honda Australia in the future, because of the increase in fuel prices,” Mr Mizuno said.

“Also, the Australian public’s intentions are as much an environmental issue as economic, and if we succeed in bringing it at a reasonable price like in Japan, then it will be in the mainstream.” Asked if the Insight would act as an effective mainstream Civic hatch replacement, Mr Mizuno said: “Yes, because (the Insight) is a hatchback itself.”

Read more:

Toyota stung by Honda Insight's success

Honda to have the cheapest hybrid

Melbourne show: Honda’s Insight via Paris

Prius v Insight fight heats up

Detroit show: Honda gives hybrid Insight

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