Honda Insight hybrid to be cheaper, if dealers cooperate

The thrust of the new Honda Insight hybrid -- which debuted in Paris this week as a near-production concept -- is to "bring hybrid vehicles into a price bracket where a broader range of people can afford them," says the press materials. Cheaper, in other words. The current estimate is that the Insight -- powered by a 1.3-liter gas engine and Integrated Motor Assist, good for about 45 mpg, on average -- will cost about $20,000, though final pricing will be announced closer to the on-sale date next spring.

It must have taken a heroic effort for Honda to hit that price point. According to the company, major savings had to be realized in the design and manufacturing of the IMA and other hybrid components (like the battery). Tankers of midnight oil must have been docked right outside Honda's R&D center.

However, all that hard work -- and the neat marketing and sales strategy designed to undercut Prius -- will amount to little if Honda dealers tag on thousands of dollars more in dealer markups and price premiums, as they have been notoriously doing with the Fit and Civic Hybrid. "We don't like it whenever premiums are added," says company spokesman Kurt Antonius. "But it's driven by supply and demand. We don't condone it but we can't control it."

Perhaps not, but Honda of America could probably, oh, let's say, de-incentivize the practice, and considering that the low entry price of the new Insight hybrid is the whole point, I suspect they probably will.

More about the car: Yes, it looks vaguely like a Prius. "We would say it looks more like the Clarity," says Antonius, referring to Honda's sleek and awesome hydrogen-powered car. I would say that the Prius, the GM Volt and the Honda Insight all resemble one another as a consequence of aerodynamics and engineering constraints that nominalize design. In other words, if you want a car of a certain size to carry five passengers and some luggage, and you want it to be as aerodynamically efficient as possible, there's only so much you can do about styling.

Unlike the Prius, the Insight does not move under electric power alone. Honda has long believed the tradeoffs of weight and cost don't justify electric-only propulsion. The company expects overall mileage to be like that of the Civic Hybrid.

Honda expects to make 200,000 Insights per year for the world market, 100,000 of them destined for the U.S.

-- Dan Neil

Photo: Honda

<< Click here for more 2008 Paris Motor Show coverage. >>

Comments

[wtobias]

this is were the big three should have been but because of the there union welfare they cant compete they never will they might as well start making soup cans or some thing easy to build but more then likely it would leak and need a recall what id like to see rather then crap over the taxpayer go back to the unions for the money

[bob]

Fabulous !

[US consumer]

I thought the price was going to be around $18000 as Honda officials previously announced so that american consumer can afford this car rather than paying high premiums for a hybrid like prius.You don't save any money by buying prius at current prices. If the price after shipping handling and taxes goes above $20,000 you are better off buying a civic or corolla at invoice prices because it will take about 7-8 years to break even and by that time you will definitely have something with much better technology much better than prius or insight.

[tbfee]

Tankers of midnight oil? To get the price "down" to $20,000?

Hmmm.... I paid $21,600 out the door (that's with tax and tags) for my Civic Hybrid, 18 months ago. That last sixteen hundred bucks must have been tough, huh?

[Leo]

wtobias: the problem with the big 3 has nothing to do with the unions, but their corporate management! They were greedy in pursuing the profits to be found in the big SUVs at the cost to other smaller and more fuel efficient vehicles. Ford should have a good vehicle in their fusion hybrid coming soon, hopefully...

[Tom Barclay]

WTobias, before you mouth off, you need to be working in a non-union sweatshot, with no medical insurance or benefits and in a chronic race for the bottom of the wage stack, as did my grandfather. Then you'll be qualified to have an opinion. Until then, you're only venting neo-con sewage.

[Nelzrad]

I agree with USConsumer. Americans are always trying to keep up with what is popular. Some people think that by driving a hybrid, like the Prius, that they are putting off an image of some sorts. What that image is, i don't really know...but it's something like this, I can afford your luxo-gas guzzler, but I choose to be "environmentally friendly" and drive this little odd looking car so I can spend what I save at the pump on more Starbucks and other worthless crap I don't need. Buy a three or four year old Corolla, get and average of 34 mpg and wait untill the EV technology hits the market, hybrid is not the future, EV is.

[Anonymous]

I would guess the unions contributed the problem as did management.

[Jango Leno]

Howdy folks, so where's the "pick me up" in these comments ? Am I to learn about all the blessings that come with hybrid cars and energy-mix solutions to save some bucks on gas as the motor's food...
(Recently read about the doubled gas prices abroad.)
Years ago I stopped ordering the XXL-Coke and all that menu add-ons and instead am feeding my car (what would've been my horse some hundreds years ago) to keep me going and relying on that iron as my true friend in good times and good times gone bad. So, what's all the hustle about?
I mean a Ford is a Ford and it's no overaged used-cars seller but more presidential than any aerodynamic teardrop-appearance of low-price hybrid in such enlighting colours like grey-silver-metallic or invisibly-anthracite could ever be.
Caught in the act drivin around in such a "gas-spare-racer" like that Honda instead of some shining Buick or Caddy is in my opinion almost as humiliating as when somebody stuck a banana in my pants and turned the monkey loose.
(Recently read about NY city intending to replace that proven work-horse Crown Victoria-Ford by some type I do not even remember its name.)
Some weeks ago I really enjoyed to drive through the desert of Nevada sittin within some golden Ford Fusion (it was an automatic) from Sin City to blessed L.A. and of course back to Los Vegas to have some more fun the same day. And let me just tell you bout my experience:
- I loved listening to Highway Rock (surround sound).
- I loved sitting on the broad and comfortable leather seat
- I thought: "TYG for the air-condition." (a dozen times)
- By drivin in a very sensible and careful way I was able to save up to 25% of gas, but meanwhile enjoying a ride in a livin-room seat... using these dollars on feeding the slots afterwards.
I will cling to my way of life and
to travelling comfortably and savely through the desert and back again. And I don't wanna be left behind while saving some bucks on gas (meaning water for my horse).
Jango Leno, Los Angeles, CA

[muD]

My parents bought a Civic Hybrid for MSRP in June, in the Midwest when waiting lists were months long.

As for these defenders of the union angels, there are none. UWA workers are people, as good and as bad as everyone else. But before feeling sorry for them remember that throughout the late seventies and eighties Detroit continually laid them off as they shut down plants. Then in the nineties, when SUV sales were booming and 70+ hour work weeks and $100K annual earnings were common what did the UAW negotiate for? Plowing the record profits back into R&D? Trying to recapture the middle of the market that the Japanese owned? No. Some people never learn.

You can blame management, but they were granting themselves stock options and raking in enough money to live out life comfortably after they were fired for incompetence. They had their long-term planned for, but the union ignored the long-term for the short-term and now they are being laid off again and the overtime, and the monster paycheck, is gone.

[mab]

I agree that the Detroit automakers management and UAW both share the blame for the downfall. The amount of the share may differ based on one's viewpoint. In my experience U Ain't Working ( UAW ) is a major contributor. I was working on test equipment at a Delphi facility one Saturday. UAW mechanics had to do the resassembly and then I could test and verify system operation. At 12:00 pm it was quitting time for the union, even though there was only 1/2 hour of work remaining. It was better to quit for the day and return on Sunday. Oh, Sunday is double time with a 4 hour minimum. 1/2 hour of wok = 8 hours pay.

The last car we bought was a Honda Civic Hybrid, early last year. Very happy with it. None of the problems seen with our previous GM vehicles.

[foxy]

hybrid schmybrid..
I am driving a 1997 VW diesel w/ 264,000 miles and still getting 50 or better mpg. Also, we are using AmeriGreen biodiesel and the car now has an minimal carbon foot print yet retaining high mpg. These cars have incredible torque, quick accelleration and carry 4-5 adults comfortably. I can not imagine owning another type vehicle.

[gerrrg]

TO foxy:

Diesel only works because there aren't that many diesel vehicles in the US. But the moment diesel catches on, it is susceptible to the same market forces for commodities (the biomass used to generate bio-diesel) and plant oil in general. The unintended outcome to everyone moving to diesel is the deforestation of habitats to make way for bio-crops. It's already occurring along the equatorial regions of the world. And the ultimate result is greenwashing - the net result is hardly carbon-neutral.

Hybrids are just one step of the process to get to near-clean electric cars - electricity can be clean, given the right incentives and investment.

[Robert NO longer in LA]

And Honda dealers STILL screw the widows and widowers, with undercoats and clear coats - NEITHER of which are of any benefit, except to the Dealers' profit. NEVER, let a person go alone into the Finance Dept, or ANY Dept, at ANY car dealer - you may as well toss a baby into a cage of starving pit bulls.

[pw]

Tom Barclay :

If people didn't buy Priuses, then companies wouldn't make them. More than looking cool, green people know that spending more will make big companies pay attention to them. You are the one who is image concious.

[Random]

Personally, $20,000 is not a "cheaper" price-tag. If they made them in the price range of the Fit or the Yaris, I think more consumers would make the switch over to Hybrid. As it stands now, most entry-level consumers and young people generally cannot afford a car at this cheaper rate. Maybe, Honda should make the car smaller to cut the cost of the technology. No matter what, 20 grand is still way too expensive. Especially considering most people are skeptical about the mechanical cost of repairs involved with the new technology.... and the fact that people are just afraid to buy things right now. HELLO, ECONOMIC RECESSION.

[Ken Hansen]

Folks...when those Prius batteries tap out will it really all be worth it - financially or greenwise? I drive American iron and have always been content with it - good mileage, low prices for repairs and parts, safe, comfortable and economical...test drove a smart car two days ago....my body is still vibrating...as far as intelligence goes about vehicles I was at a gas station the other day and a guy was leaning against his Toyota truck and said to me (I am not kidding here) "The problem with Americans is that they buy too much foreign stuff".....DUH!!!

[Jack T]

You mean that isn't a Prius?? It looks like Hionda reverse engineered a Prius and put their badge on it.

Why can't a car that gets Prius like mileage actually look good? These things are like used bars of soap.

[Snoogins]

Am I supposed to be impressed with 45 MPG?

[VICB3]

If dealers pose a potential problem with market entry, then don't use the dealers. Sell it direct off the web for example, using car rental firms such as Enterprise to provide your demo services for you.

Time to move to a new retail model here.

[Car Fan]

*Unlike the Prius, the Insight does not move under electric power alone.*

This is incorrect as the Prius will move by either the electric motor or the gasoline engine. And the new Prius models (2009) will be plug-ins.

[Toyota knows]

Simple if you want Hybrid stick with Toyota, they are on second generation technology the others are using Toyota's old technology leased to them.

Honda is behind Toyota in this market, and ford and Chevy hybrids are a joke. Really who is gonna pay 10K more for a hybrid Yukon or Tahoe when the mileage is still terrible and the quality is bottom of the barrel?

I left US cars this year and have never been happier!

[fzdybel]

"Time to move to a new retail model here."

Sure. You can always send your car to the web to get it serviced.

[dj]

I drove a toyota prius for 9 days. I drove it to get the worst mileage possible, petal to the metal uphill and quick starts. I got 45MPG. worst case!!! I just wanted to show all of those prius drivers that are all blocking the roads that their car can move... Get out of the way!! The prius is still a to ugly car.

[VICB3]

"Sure. You can always send your car to the web to get it serviced."

As if dealers - and I mean for any brand - provide such excellent service. (Rarely in California at any rate.)

Honda has the opportunity to start something new here. That might also include using thier own deep pockets to establish Honda owned service centers where the cars might be serviced right without corner cutting. In addition, corp. would receive direct feedback re reliability issues, aftermarket modifications, and such. Finally, via loaners,service customers would be allowed to test drive - and perhaps consider buying - a newer car for themselves.

This is much the same as takes place in Japan, where the car stores ARE company owned, and the emphasis is very much on doing whatever it takes to keep the customer a customer for life.

As I said before: time to change an outworn marketing model.