Honda Rolls out New Civic, Hybrid Model for Japan
Date: 23-Sep-05
Country: JAPAN
Author: Sachi Izumi
Production of the Civic -- which has sold some 16 million worldwide -- has dropped 24 percent from a 1997 peak as consumers shifted to newer designs.
But the Civic still accounts for nearly a fifth of Honda's global sales and is seen, along with the company's best-selling Accord, as a lifeline in ferociously competitive world markets.
"The Accord and Civic are Honda's lifelines and sales volume matters," said Shotaro Noguchi, Mitsubishi Securities auto analyst. "The Civic is highly competitive (in the US) in the current market where gasoline prices are a focus of attention."
Japan's third-biggest auto maker hopes the Civic revamp will catch buyers' imagination and has targeted annual global sales of more than 600,000 units, including 40,000 of the gasoline-electric hybrid model.
It is sticking to its 2005 worldwide group sales target of 3.42 million cars.
"We have developed the remodelled Civic to add new value to customers' needs in various regions in today's globalised society," Chief Executive Takeo Fukui told a news conference.
"We are confident that it would exceed the expectations of customers in Japan and all around the world."
The eighth version of the Civic made its debut earlier this month in the United States, Honda's biggest market and where hybrid vehicles are gaining popularity as fuel prices soar.
Honda aims to sell 28,000 Civic hybrids a year in the US
The new Civic will go on sale in Europe from January.
CUTTING COSTS
Analysts expect the new model to attract strong demand overseas, but may struggle at home as its higher price may put off buyers who have been used to its low-price image.
The latest Civic carries a lighter engine than previous models, using fewer components so as to reduce costs.
The engine also uses a mechanism that helps it burn fuel more efficiently while enhancing driving performance, raising the new gasoline-only Civic's fuel economy by 6 percent.
The new hybrid system enables the gasoline-electric vehicles, like Toyota Motor Co.'s Prius sedan, for the first time to run solely on the electric motor at low cruising speeds.
Sales of the remodelled gas-only Civic start at 1.79 million yen ($16,090) before tax in Japan. The hybrid versions, which will hit the market on Nov. 22, start at 2.09 million yen.
Honda will sell the new Civic only in a 4-door model in Japan, while the US market has both 2-door and 4-door versions.
"We want to strengthen our business in the 4-door market (in Japan)," Fukui said. "We want to focus."
Shares in Honda dropped 2.12 percent to 5,990 yen on Thursday, underperforming a 0.28 percent fall in the main Nikkei average
($US1=111.25 yen)
