Honda's Hybrid Shatters Sales Target in First Month

By MARIKO SANCHANTA And HIROYUKI KACHI

As Toyota Motor Co. attempts to rebuild its reputation around the world, Honda Motor Co. on Wednesday said orders for its new hybrid sports car exceeded its forecast by 10 times, quietly stealing the march from its main Japanese rival.

Honda Motor Co. unveiled its CR-Z model in Japan roughly a month ago, making it the first mass-market hybrid sports car to hit dealerships. The company said cumulative orders for the car had exceeded 10,000 vehicles, far surpassing its monthly sales target of 1,000 vehicles.

Japan's second-largest car maker plans to introduce the model in the U.S. and Europe after June, with a combined annual sales target of 40,000 to 50,000 in the three markets.

The move comes as Honda has quietly benefited from its chief rival's woes. Toyota has recalled more than eight million vehicles world-wide, denting consumer confidence in its brand in the U.S., its biggest market. Though Honda has publicly said that it wouldn't offer special incentives for drivers to buy its cars over Toyota's – unlike U.S. rival Ford Motor Co. – its brand has steadily gained more fans over the past few months. In ALG's Spring 2010 Automotive Consumer Attitudes Survey, Toyota fell from first to sixth place in its perceived quality score, and Honda jumped to first place with a score of 83.2, followed by Nissan Motor.

"If [Honda] can gain sales, they are going to promote the brand at the expense of Toyota. They are not blind to the situation," said Chris Richter, automotive analyst at CLSA Asia-Pacific Markets. Honda is the second-largest hybrid car maker by volume after Toyota, and its Insight hybrid car was the first mass-produced hybrid automobile sold in the U.S.

Honda's new CR-Z is the successor to its Honda Civic CRX, a two-seater coupe that was introduced in 1984. In Japan, the CR-Z costs 2,498,000 yen ($27,630) for the high-end model. Honda said 90% of the orders had been placed by men, with most purchasers in their 30s and 40s. Honda has nearly reached its domestic annual sales goal of 12,000 in just under a month.
Still, Honda has a long way to go to catch up with the popularity of Toyota's Prius hybrid vehicle, which is still the best-selling car in Japan. More than 27,000 Priuses were sold in February, making the Prius the best-selling model for the 10th straight month, according to the Japan Automobile Dealers Association.

"It might be too small for Americans," said Mr. Richter, referring to the fact that the North American model of the CR-Z will only have two seats. "The Prius is a bona fide family car."

Honda expects net profit to soar 93% to 265 billion yen in the current fiscal year ending March 31. The company said Tuesday that it expects to sell around 100,000 units a year in India and Thailand of a new, low-priced model slated for launch in 2011. The new small car will be priced around 500,000 rupees ($11,000) and based on popular four-door Fit model.

Source;
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