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Posted on: Friday, June 17, 2005

Civic Hybrid getting redesign

By ALAN OHNSMAN
Bloomberg News Service

LOS ANGELES — Honda Motor Co., the world's second- biggest maker of gasoline-electric autos, is redesigning its Civic Hybrid and raising the small car's fuel economy to try to win U.S. sales from Toyota Motor Corp.'s Prius.

The revamped Civic "will be a stronger competitor," John Mendel, sales chief of Honda's Torrance, Calif.-based U.S. unit, said. "I think you'll see a vehicle that from a performance standpoint will be spot on or better than Prius. Better packaging, better safety."

Honda got an early lead in hybrid sales when its two-door Insight debuted in 1999, six months before Toyota brought the Prius to the U.S. The companies' annual sales of gas-electric cars were similar until 2004, when the revamped Prius outsold the Civic and Insight hybrids 2-to-1. Prius monthly sales this year averaged 8,737 through May, four times the hybrid Civic's 2,156.

"Prius is a unique car. It tells everyone you're driving a hybrid," while the gas-electric Civic looks like the gasoline-only version, said Brett Smith, an analyst at the Center for Automotive Research in Ann Arbor, Mich. "Honda made a complete, utter commitment to making the hybrid Civic a normal Civic. In that sense, they made a mistake."

The new hybrid model will have more significant differences in exterior and interior styling and options to distinguish it from the gasoline-only model, said Mendel, 50.

"It won't be as different from a conventional Civic as Prius is from a Corolla," Mendel said. "There will be a couple of unique colors only for this model and we will identify it better as the hybrid version," he said, without elaborating.

Mendel said Tokyo-based Honda will boost the fuel economy, without saying how much.

Honda also is redesigning the gasoline-only Civic. The revamped gasoline-only sedan and coupe will reach dealers in September, with the hybrid version available late that month or in October, company spokeswoman Sara Pines said. The revamped cars will be 2006 models, produced mainly for North America at plants in East Liberty, Ohio, and Alliston, Ontario.

The automaker now builds all its hybrid models in Japan. Mendel wouldn't confirm whether the 2006 Civic Hybrid would be produced at the Ohio plant. Toyota in May announced plans to make hybrid Camry sedans in Georgetown, Ky., in 2006.

Honda's hybrid lineup also includes a version of its Accord sedan as well as the Insight. Toyota has the Prius, the Lexus RX 400h sport utility vehicle and a version of its Highlander SUV, added this month. Ford Motor Co. sells a gas-electric version of its Escape SUV.

The new models and U.S. gasoline prices that rose to a record in April helped hybrid sales more than double to 73,335 this year through May from 30,194 a year earlier. They accounted for 1.1 percent of new cars and light trucks sold.

Hybrids reduce fuel use and emission by using electric motors, powered by a battery pack that recharges during braking, to assist the gasoline engine. Prices for the vehicles generally are at least $3,000 more than for comparable gasoline-only versions. Honda, Toyota and Ford have said most consumers won't make back that premium through fuel savings.

Improved fuel economy and total performance for the Civic Hybrid may contribute to sales gains, Smith said.

The automaker probably will boost the hybrid's gasoline engine to at least 100 horsepower, from 85 now, said Michael Omotoso, a Troy, Mich.-based analyst for Global Insight Inc.

Honda estimates the current Civic Hybrid has a combined 98.4 horsepower, including 13.4 from the electric motor. Toyota's Prius has total horsepower of 104, including a 76-horsepower gasoline engine and a 28-horsepower electric motor.

The U.S. Environmental Protection Agency estimates that the Civic Hybrid travels 50 miles per gallon of gasoline in combined city and highway driving. The agency rates the Prius at 58.8 mpg.

The EPA's fuel-economy test, which hasn't been revised in two decades, is conducted under ideal conditions and at lower speeds than most people drive. As a result, many hybrid owners don't achieve the agency's averages.

The current Civic Hybrid has starting prices of $19,900 for manual transmission and $20,900 for the automatic version. Prius prices begin at $20,975.