Honda defends fuel efficiency lead as Hyundai gains

Takanobu Ito became a star at Honda Motor Co. with his work on the NSX sportscar, the company's most powerful model. Now, as chief executive officer, he's focusing on fuel efficiency as Ford Motor Co. and Hyundai Motor Co. threaten Honda's leading position in North America.

While Honda's fleet is rated the most fuel-efficient in the U.S., Ford's new Fiesta subcompact gets up to 33 miles per gallon in combined city/highway driving, compared with 31 mpg for Honda's most economical Fit hatchback. Hyundai's new Sonata sedan tops Honda's top-selling Accord in economy and horsepower, and its revamped Elantra compact promises to use less fuel than Honda's Civic.

"Ford is coming back, and Hyundai is gaining market share,' said Tadashi Usui, an analyst at Moody's K.K. in Tokyo. "The gap between Japanese automakers and rivals is shrinking.'

Honda, after axing its V-10 NSX supercar project in 2008, is redoubling efforts to boost fuel efficiency to fend off growing competition. Ito delayed the release of a revamped Civic compact after telling engineers he was unhappy with its size and fuel economy, said Tomohiko Kawanabe, president of Honda's research and development unit.

'Leapfrogged in Technologies'

Even as factors including pricing and design shape research efforts, "fuel efficiency has become the first priority in our discussions," Kawanabe said in an interview at Honda's research center last month in Wako, west of Tokyo.