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Honda Troubles: Sluggish Insight Sales, Costly Fit Hybrid Technology

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2010 Honda Fit Sport

2010 Honda Fit Sport

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The tiny kei cars still beat out the Insight, but no regular-size cars did

The tiny kei cars still beat out the Insight, but no regular-size cars did

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2010 honda insight european spec 016

2010 honda insight european spec 016

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Honda had big plans for the 2010 Insight. With low pricing and high tech, Honda hoped the Insight could leapfrog past the Toyota Prius to become the hottest hybrid on the market.

Unfortunately, Honda's dreams haven't exactly played out as planned. When the 2010 Insight launched in March of last year, Honda set a U.S. sales goal of 90,000 units in the car's first 12 months, but as of December, just 20,572 had been purchased. Last summer, Honda downgraded its projections for the Insight to 60,000 cars -- a target the company still isn't likely to reach, since the model's one-year anniversary is just around the bend, and it's being outsold by the Prius nearly seven-to-one.

Numerous factors have been blamed for the Insight's troubles: inexpensive gasoline, poor marketing, "biblically terrible" reviews. Now the company's executive vice president, Koichi Kondo, has admitted that Honda cut too many corners during the Insight's development, particularly where size is concerned: "I think we compromised too much on size in pursuing fuel efficiency." In Japan, where the population is thinner than in any other industrialized nation, that's been less of a problem, and the Insight has been a strong seller (though still not as strong as the Prius). For U.S. consumers, however, the Insight can feel uncomfortable and cramped.

Honda is also having troubles with its popular compact, the Honda Fit (and we're not just talking about the recall). While sales of the 2010 Fit remain strong in the U.S. and elsewhere, Honda is planning to bring a Fit hybrid to the market later this year. The problem is, hybrid technology is expensive, and the traditional Fit already boasts commendable fuel economy. So, Honda rightly wonders, how many customers are going to shell out several thousand more for a hybrid version of a car that already earns 28 mpg city/35 mpg highway? Kondo admits that his engineers are "struggling" with the problem -- and we're guessing his sales team is, too.

[Bloomberg via Autoblog]

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Comments (6)
  1. I know that Honda loves to do things its own special way but they really need rework the IMA system before using on the Fit or any other vehicle. The competition is too fierce now ...
     
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  2. Correct me if I'm wrong, but I believe that the Insight factory is operating at capacity. Yes, sales in the US are disappointing, but they are selling all they can make to other markets.
    If they're selling all that the factory can build, where's the problem?
     
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  3. What happened to those diesel engines we were promised? Sounds like Japan got bad advice from the sales channel, or ignored the advice they got. If Honda is happy with a me-too offering, they will get me-too sales figures as a reward for being sheep. So, keep making the Insight to combat the Prius while developing the doppleganger: Clarity.
    The environmental bar has been raised--why has management been so timid in leveraging their technological advantage?
    "So in war, the way is to avoid what is strong and to strike at what is weak."
    - Sun Tzu
     
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  4. @Doug: You may very well know more than I about factory capacity (though capacity could've shifted to accommodate reduced demand). However, it's very clear that Honda set a sales goal of 200,000 Insight units worldwide, and that the company will be lucky to make 75% of that total. That's the problem.
     
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  5. We have been waiting for the Honda Fit Hybrid and now I have been reading that there is some uncertainty about its release this fall. The Prius and Insight are not practical enough. Since we only have one car, we want something that is utilitarian and can be used for carrying, camping, shopping, and traveling. We also want a car that is not expensive, mechanically sound, structually safe, and an environmentally responsible--- with outstanding gas milage. The Fit seems to come close to filling that need. We hope it will be available in the fall or 2010.
     
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  6. We bought our Insight over Memorial Day weekend and now have more than 7600 miles on it. I can't understand why more U.S car buyers haven't fallen in love with the Insight as much as I have. I can't understand the slamming this car is getting on the internet.
    "Noisy" wrote one user. Well, the doors go Ker-thunk when you close them, and it's almost as quiet as the Grand Cherokee I traded in. There is the unique sound of the CVT transmission, but it isn't unpleasant, just different. I think of it as the sound of money. We're getting 43.7 mpg in mostly in-town driving.
     
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