Raw Japan

Slices of Japanese business, politics and life

Honda’s Insight takes on Prius

February 25, 2009

It took almost 10 years, but Honda may finally have a hybrid hit on its hands this time.

The five-seater Insight went on sale this month in Japan ahead of other markets and orders have already climbed to 15,000, triple the number Honda hoped to sell on average in a month here.

That’s already just 2,000 shy of the total sales for Honda’s first hybrid car, also called Insight, in its seven years on the market from late 1999.  (The two cars share little more than a name.)

First-month orders are always an anomaly in Japan, where the shelf life for “newness” is punishingly brief. But if the Insight’s response is anything like what the second-generation Prius did for Toyota, Honda is in for a big boost to its already-green image.


So what’s Honda doing differently this time?

In a word, it’s affordability. While past hybrid cars have carried a price premium of roughly $5,000 and upwards over a similar gasoline-engine car, the new Insight starts at just 1.89 million yen ($19,700) in Japan.

Toyota’s current Prius costs around $4,000 more. In the U.S., the most receptive market to gasoline-electric cars so far, Honda has promised a price tag below $20,000.

Toyota, the hitherto-unchallenged hybrid king, could be kicking itself right about now.

Instead of aiming for broader proliferation with a cheaper car, Toyota has packed its third-generation Prius, due out in May, with advanced technology, making it more expensive than the current version. The next Prius is bigger, more powerful, and sees better listed mileage (50 mpg vs Insight’s 41 mpg), but in the current economic climate, I’m guessing easy-on-the-wallet will trump high-tech gizmos.

And what Insight lacks in actual fuel-saving hybrid technology compared to the Prius, Honda has offset with a clever “Eco Assist” function.

Among other things, the system features a speedometer that changes colours from shades of blue to green to indicate the level of fuel-efficient driving.  I found myself going easy on the gas pedal when the light turned blue in a test drive Tuesday.

At the end of a drive, a “scoring” function displays the number of leaves on a virtual tree in the dashboard: the more leaves, the more gas you’ve saved.

The Insight’s chief engineer, Yasunari Seki, told me last month that the winner in a contest for fuel-efficient driving held in the U.S. for motor journalists clocked a whopping 72 mpg.

Hiroshi Kobayashi, a top official for Honda’s domestic operations, says that not a few customers have come to showrooms to trade in their Prius for an Insight. Sure, some are still waiting to look at the next Prius first, but many are eager and ready to make the switch to a cheaper car.

Many conquests have also been made from premium import brands, Kobayashi says, and I’ve seen this myself.

I have a friend who’s dying to get his hands on the Insight. His previous car? Mercedes’ sleek CLS500. When I asked why he wasn’t going for the Prius, he said the Insight “looks cooler, is cheaper, and Prius’ superior mileage isn’t much of an incentive any more with cheaper gas”.

Okay, some journalists facetiously call the Insight the “Honda Prius” for the rear end’s resemblance to the Toyota, but Honda’s strategy is working on my friend.

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/