Honda to launch low cost hybrids, and a dedicated hybrid model in 2009?

The Wall Street Journal reports that Honda is moving forward with a new generation of hybrid cars that will hopefully have just a small price premium over regular cars. This would allow them to pay for themselves through gasoline savings much more quickly.

Honda’s goal is to sell 500,000 hybrids a year sometime after 2010. Still, that would fall short of Toyota’s target of selling one million hybrids annually sometime early in the next decade.

Honda says it will increase sales by introducing a lineup of hybrid vehicles, including a sport hybrid based on the CR-Z, a redesigned Civic Hybrid and a hybrid version of the fuel-efficient Fit subcompact. The key element of its new green strategy is to make hybrid vehicles more affordable.

“It is important to move hybrid vehicles from the current image-oriented stage to the new stage of full-scale penetration” of the market, Mr. Fukui said.

Mr. Fukui said that the new vehicle, which has yet to be named, will be affordable and that weight reduction, more compact components and new technologies will help increase fuel efficiency.

At present, hybrids cost significantly more than gas-engine vehicles. The Toyota Camry hybrid, for instance, costs $6,730 more than the gas-engine model, while Honda’s Civic hybrid is about $4,000 more than the gas model.

Honda’s first new vehicle will be sold only as a hybrid, as is the Toyota Prius. Honda expects to sell about 200,000 of these vehicles annually, half of those in the U.S. market. The car is based on the design of the FCX Clarity, the fuel-cell vehicle.

I am excited to see a direct competitor to the Prius. I can’t wait to see what Honda comes up with.