Honda Motor Co.'s Insight hybrid may fall 33 percent short of its U.S. sales goal as cheap fuel, the economic slump and competition from Toyota Motor Corp.'s Prius undermine demand for the model.
First-year sales of Honda's gasoline-electric Insight, which debuted at U.S. dealerships in late March, may be between 50,000 and 60,000 units, John Mendel, the company's U.S. executive vice president, said in a June 11 interview at Honda's U.S. headquarters in Torrance. "I don't think we'll get to 90,000," he said.
Gasoline prices in the U.S. have fallen 35 percent over the past year, eroding demand for fuel-efficient cars, even as the overall market has plunged 37 percent due to the recession. Toyota has cut the base price of the Prius by $1,000 to compete with the Insight
"Sales of hybrids have a strong correlation to gasoline prices, especially in the U.S. and Toyota's Prius has had more customers in the past, so it's a tough competition for Honda," said Koji Endo, an analyst at Credit Suisse Securities (Japan) Ltd.
The lower-than-expected demand in the U.S. contrasts with sales of the car in Japan where fuel prices are 78 percent higher than in the U.S. The Insight was the top-selling car in Japan in April and was overtaken by the Prius last month.
Honda fell 2 percent to 2,780 yen as of 1:44 p.m. in Tokyo. The shares have gained 46 percent so far this year.
Full story
Gasgoo: auto parts source
