Honda to make affordable hybrid cars along with Chinese partners

According to a news report released on 12^th of December, Japanese luxury auto maker Honda Motor is considering to make cost effective hybrid vehicles for the Chinese car market. Honda will be working in collaboration with two local Chinese car makers in order to manufacture these affordable hybrid car models. Honda Motor is said to be partnering with the local Chinese car makers, Dongfeng Motor Group and Guangzhou Auto Group in this cost effective hybrid car projected. It is also said that Honda is aiming to work things fast and release the first such cheap hybrid car for the Chinese car consumers in the year 2016.

According to the news report, Honda’s new slew of cheap hybrid vehicles will be based on the car company’s subcompact Fit or Jazz hybrid hatchbacks. The hybrid models are expected to have a price range of about ¥1.5 million (equivalent to US dollar 14,435). This price range is about half the price range for the hybrid vehicles that are currently available in the Chinese car market, the journal pointed out.

The news journal further mentioned that the Japanese car maker along with its Chinese counterparts is aiming to manufacture several thousands of these cheaper hybrid vehicles every year.

Honda Motor is currently selling its Fit hybrid vehicles for ¥1.63 million in Japan, which makes the Fit hybrid the world’s most cost efficient hybrid model at present. Thus, the Japanese car major is now aiming at the Chinese car market which is considered to be the world’s largest car market. As a part of this growth strategy in the large car market, Honda Motor is thus planning to provide these new affordable hybrid vehicles in the car market of China that will have the price range somewhat similar to that of the Fit hybrid car offered in the Japanese car market.

Currently, the Honda Fit hybrid is much expensive in China as compared against the Japanese counterpart. This is because of China’s high excise duties that make the Japanese Fit hybrid’s price become twice as much as compared to the other hybrid vehicles in its own class, and make the car’s price rise as much as around ¥3 million. Hence, Honda is taking an initiative to bring down the price of its hybrid models and make it more affordable for the Chinese car consumers.

In the first 11 months of the current year of 2013, Honda has witnessed the sale of just 133 of the Fit hybrid models in the car market of China. Honda’s partnering with the local Chinese car makers will effectively help the company to bring down the hybrid cars’ price, as the excise duty will be reduced by a considerable amount. Moreover, the sourcing of the local car components will also help in production cost reduction to a great amount. Thus, Honda can safely expect to decrease of the hybrid cars by at least half the current price or even more, and boost its sales.