Hybrid Honda Fit Is Sound Marketing Play

Honda announced it will roll out a gas-electric hybrid version of its Fit sub-compact. The Fit already gets in excess of 30 miles per gallon for combined gas mileage. And there are many, especially at U.S. automakers, who have long argued that putting such systems in already fuel efficient vehicles is a dumb idea.

I disagree. For openers, every company needs vehicles that will achieve greater than 40 mpg to help them reach new fuel economy standards, as well as impress consumers.

I recently shopped for a new car, and I was paying close attention to fuel economy. I was amazed that a car as small as a Fit or Toyota Yaris did not achieve fuel economy much closer to 40 mpg. Car buyers, especially young ones, are expecting…yes, exepecting…automakers to have more vehicles that achieve greater than 40 mpg.

GM and Chrysler have pursued with gusto hybrid powertrains that will work in SUVs and trucks. Do the math, they say, and the impact on societal gas savings, will be greater. But I’m not so sure. Sales of the hybrid Chevy Tahoe and Chrysler Aspen are expected to be well below 10,000 units a year for each model the next few years. The pricetag and fuel economy gains do not look that impressive when comparing with other vehicles.

The hybrid Fit will be the fourth hybrid from Honda Motor Co. by 2015.

Honda already was planning to roll out an all new dedicated hybrid vehicle early next year, to challenge Toyota’s Prius, followed by a sporty hybrid and a redesigned Civic hybrid.

The greener Fit’s arrival dispels Honda’s earlier skepticism about the viability of mounting pricey hybrid systems on small, low-priced cars that already get great mileage. President Takeo Fukui has changed his tune — in time with changing market realities. Honda expects that they will be able to charge for the system, and have some of the cost to consumers offset by government incentives.

“The Fit has great fuel efficiency to begin with, and if you put in a hybrid, it’s going to get even better,” Fukui said while announcing the car at a mid-year news conference. “So with crude oil prices going up this much, I think a Fit hybrid is now starting to make sense.”

The fact is…going forward in an era of high gas prices, people who are already shopping a small fuel efficient vehicle are apt to choose the model that delivers the overall best fuel economy. A hybrid Fit, depending on final retail price, will look very good against non hybrid versions of the Nissan Versa, Ford Focus, Chevy Aveo, Toyota Yaris and so on.

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