Honda Retools U.S. Fit to Regain Tiny Car Sales Lost to GM, Ford

Honda Motor Co. (7267), trailing General Motors Co. and Ford Motor Co. in U.S. subcompact car sales, will try to boost deliveries with a new Fit hatchback that the Japanese company will make in North America for the first time.

The 2015 Fit shown at the North American International Auto Show in Detroit today is roomier, faster and more fuel-efficient than the current car, while the exterior size has changed little, Tokyo-based Honda said. Along with a new body design and more standard technology, the Fit gets a new 1.5-liter engine that produces as much as 11 percent more horsepower and 16 percent better fuel economy, the company said.

“It’s simply the best Fit to date and, we believe, a new benchmark in the small-car category,” John Mendel, Honda’s U.S. executive vice president, said in a prepared statement before the car was shown. Sales begin in the spring, company said without elaborating.

While past versions of Fit have been praised by Consumer Reports magazine, the car hasn’t been a big volume hit along the lines of Honda’s Civic, the top-selling U.S. small car in 2013, and the Accord, the market’s second-biggest selling car behind Toyota Motor Corp.’s Camry. Sales of GM’s Chevrolet Sonic hatchback, at 85,646, and Ford Motor Co.’s subcompact Fiesta, at 71,073, dwarfed Fit’s 52,944 in 2013.

Yen Impact

U.S. deliveries of the Honda model, a top-seller in Japan, were limited by the yen’s high value against the dollar that made the import a money loser, said analyst Ed Kim, at industry researcher AutoPacific Inc. in Tustin, California. Honda has said it will start making the U.S. Fit at a new plant in Celaya, Mexico, starting early this year.

“Certainly the Fit fills a very important role in the Honda lineup,” Kim said. “The big story is not so much that we’re going to see a huge increase in volume necessarily, but with local manufacturing and a local supply base they can make money on it. Margins on these small cars are pretty thin.”

All versions of the angular Fit come with a multi-angle rearview camera and Bluetooth, Honda said. Options include push-button start, heated side mirrors, a moon roof, heated front seats, a 7-inch touchscreen display with smartphone connectivity and LaneWatch, a camera mounted in the right side mirror to show objects in the car’s blind spot on the center display.

Honda didn’t immediately provide pricing and volume goals for the car. The company’s U.S. sales unit is based in Torrance, California.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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