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HONDA TO DEBUT 1.3-LITER-CLASS SUBCOMPACT IN U.S. THIS YEAR

TOKYO (Nikkei)--Honda Motor Co. (7267) will start selling a 1.3-liter-class subcompact in the U.S. as early as this year to fend off its South Korean rivals, The Nihon Keizai Shimbun has learned. The model will be based on the Fit, which is highly popular in Japan, and the automaker expects annual sales of 50,000. Priced at around 10,000 dollars for the lowest-end model, it will be cheaper than the company's Civic, which is priced between 13,000 dollars and 20,000 dollars for models with 1,300-2,000cc engines. Honda at this point is considering exporting the vehicles from Japan, but may produce them in Brazil instead if the dollar continues to trade below 110 yen and makes exports from Japan less profitable or even loss making. Honda sold 1.35 million new cars in the U.S. last year, a gain of 8% on the year and a record. But the strong performance owed to solid sales of the Pilot sport utility vehicle and other nonpassenger cars. Honda and other Japanese automakers have long dominated the subcompact field, but are now facing stiff competition from Hyundai Motor Co. of South Korea. The South Korean automaker's market share in the U.S. grew from 1.8% in 1998 to 5.7% in 2003. (The Nihon Keizai Shimbun Thursday morning edition)

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Originally posted by RJC RSX
it's official! good news

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Automotive News is reporting today that Honda has denied reports by Japan's Nihon Keizai business daily that a decision has been reached to market the Fit in the US.

A Honda spokesman has been quoted as saying "It's pure speculation," and "We've said that we're studying a model that's below the Civic class, but nothing has been decided."

When queried, the Honda spokesperson with whom I conversed deferred, using the standard canned response: "We don't discuss future product plans."

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Originally posted by domn
Hmmmm.................

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Fit and Trim: Honda set to bring car smaller than Civic to U.S., but no separate brand planned
KATHY JACKSON | Automotive News
Posted Date: 1/25/05

DETROIT -- Honda plans to sell in the United States a variation of the front-drive subcompact Honda Fit, which is sold in Japan and Europe.

Honda executives have said the company will bring a car smaller than the Civic to this country but until now have not identified it.

"It will be a variation of the Fit, and it will be here not too far in the future," said Dick Colliver, executive vice president of American Honda Motor Co. Inc., at the Detroit auto show.

"Toyota has done a good job with the Scion," he said. "So that's where we're looking, to bring back the youth we've lost. With the current cars we have, that segment has shrunk."

No separate brand

But unlike Scion, Honda will not establish a separate brand for the new small car, Colliver said.

Also, the small car will not be shipped bare like the Scion and accessorized according to dealer and customer orders.

"We had conversations on whether to bring it in slashed down but decided against it," he said. "We plan to load it up. It's better to build it the way they want it. We also looked at establishing a separate brand for the new car but decided against it."

He declined to provide any other details about the car.

Michael Robinet, vice president for global forecast services at CSM Worldwide in Farmington Hills, Mich., said the U.S. Fit will arrive early in 2006 as a 2007 model. He said it will be powered by a 1.5-liter engine equipped with dual overhead camshafts and direct fuel injection.

Some dealers believe the sticker price will be about $12,000. The base price of the 2005 Civic is $13,675 including a $515 destination charge.

Civic sales, aided by cut-rate loans, rose 3.2 percent to 309,196 last year.

Factory equipped

Robinet said although Scion has done a good job attracting customers who want to accessorize their cars, he believes Honda will do well equipping its vehicles at the factory.

"Honda does a lot of production here, so they can more accurately predict what the customers want," Robinet said. "Honda would rather make sure it has the Honda quality through and through and their warranty on it. There is less room for error."

Toyota introduced its Scion youth brand nationally last year. It posted sales of sales of 99,259 in 2004 vs. 10,898 in 2003 when the vehicle was sold in limited markets. Scion has three models.

"We're all hoping Honda brings in a new product line with a more affordable car that our younger and less-affluent buyers can purchase," said Larry Mallory, chairman of the Honda dealer council in a recent interview.

Mallory, owner of Honda of Kirkland in Kirkland, Wash., also said the dealers did not want a separate franchise for the small car: "The two-channel system they currently have, Honda and Acura, is enough to accommodate any and all new products coming out."

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