Honda to build hybrid Fit, launch Prius competitor next year

Honda today announced plans to launch a hybrid version of its entry-level Fit hatchback, with the goal of making it one of the least expensive hybrids on the market. While there is no set launch date for the car, it will might be based on the next-generation of the car. During his mid-year address, CEO Takeo Fukui also confirmed the automaker is working on a rival to the Toyota Prius.

The Prius rival should arrive in 2009, and two other models are expected follow some time after, including a new Civic Hybrid and a sporty hybrid vehicle based on the CR-Z concept car. These four hybrid vehicles are expected to reach combined annual global sales of approximately 500,000 units.

The price premium for the hybrid Fit as opposed to the gas-only version will have to be under an equivalent of about $2,000 in order for customers to consider it, said Fukui.

The Prius-fighter will be a five-door, five passenger vehicle, with a design based on the Honda FCX hydrogen fuel cell car. Unlike the wave of new-generation competitors, the car will not use lithium-ion batteries, with Honda dismissing the technology as too costly. Instead, the car will feature a re-packaged and smaller nickel-metal hydride battery pack.

To meet parts demand for the added crop of hybrids, Honda's Suzuka factory will gain a new production line before 2009, boosting annual capacity from 70,000 to 250,000 motors.