Continuing its all-out assault on Toyota, Honda will reportedly launch a hybrid version of its Fit hatchback in the second half of 2010. If that schedule holds true, the Fit Hybrid will hit the market a full year and a half before originally planned.

According to Japan’s Nikkei business daily, Honda will launch the Fit Hybrid in the fall of 2010. The Fit Hybrid will likely follow closely on the heels of the production CR-Z Hybrid launch, giving Honda a full-range of sub-compact hybrids ahead of its rival Toyota.

A new version of the Civic Hybrid will launch by 2012, giving Honda a range of four hybrids, including the recently launched Insight.

The Nikkei also speculates the Fit Hybrid will retail from about $15,800. Honda CEO Takeo Fukui has stated that the Fit Hybrid won’t list for more than $2,000 over the standard car, so pricing anywhere from $15,800 to $16,750 would seem to make sense. Honda is reportedly eyeing 50,000 Fit Hybrid sales per year.

Although a lot could change from now until late 2010, it seems like Honda will beat Toyota to the sub-compact hybrid market.

Due to the steady increase in the value of the yen, Honda is considering a new plan to shift some production of the Fit hatchback from Japan to the United States. The fuel-efficient Fit is one of Honda’s most popular U.S. models.

In an interview with Automotive News, Honda president Takanobu Ito revealed that the Japanese automaker is seriously considering the production shift for the Fit. “Considering the foreign exchange, such a structural reform might be called for,” Ito said. “That is the sort of direction we are considering.”

All U.S. Fit models are currently built in Japan, greatly eroding any profits to be made on the small car.

As it stands, about 20 percent of Honda’s U.S. offering are made in Japan, with the remaining 80 percent produced locally. Ito says he would like to see that ratio retained, albeit with the 20 percent mix shifted to high-tech models, such as Honda’s hybrid offerings.

No word on where in the U.S. the Fit would be produced

Honda Motor Co. (HMC) Friday announced a voluntary worldwide recall of 646,000 compact cars so that it can examine window switches that can overheat if exposed to liquid, causing smoke or melting or even catch fire.

Only about 10% of the Fit hatchbacks recalled will need replacement switches, with the remainder requiring the fitment of waterproof skirts to prevent water seeping in.

"Under some severe operating conditions, water, rain, or other liquid may enter the driver's window and reach the master power window switch, resulting in impaired function of the switch," the Japanese car maker said in a statement. "If the master power window switch is damaged as a result of the liquid intrusion, it may result in failure of the switch and overheating.

"An overheating switch may cause smoke, melting or, potentially, fire," it added.

The recall affects models built in Japan, China, Brazil, Thailand, Malaysia and India. Of the vehicles being recalled, 171,372 are in the U.K., where the model is known as the Jazz, 141,140 are in the U.S. and 229,000 are in Latin America.

Honda's recall comes as Toyota Motor Corp. (TM) this week halted sales of its most popular models in North America in response to growing concerns that possible defects to accelerator pedals may cause vehicles to speed up unintentionally. Toyota Wednesday expanded its recall to Europe and on Thursday to China.

OKYO/JOHANNESBURG (Reuters) - Honda Motor Co recalled 646,000 of its Fit/Jazz and City automobiles globally over a faulty window switch after a child died when fire broke out in a car last year.

The recall includes 140,000 vehicles in the United States and covers the models sold in North America, South America, Europe, South Africa and Asia, but not Japan, a spokeswoman said.

The Fit is Honda's best-selling model in Japan.

Earlier this week, Toyota Motor Corp's announced it would extend to Europe and China a recall of millions of vehicles due to faulty accelerator pedals and floor mats.

Honda said the recall was to fix a defective master switch, which could cause water to enter the power window switch and in some cases cause a fire.

There were three reported cases of fires due to the defect, two in the United States and one in South Africa, the spokeswoman said.

A spokesman for Honda in Britain said the company had recalled all 2002-2008 year model Jazz units in South Africa and will recall 172,000 units in Britain after a fire broke out in one last year, killing a toddler.

Honda said on its website www.honda.co.za it would "inspect and modify driver door power-window switches that may, in some cases, short circuit as a result of water intrusion."

Vanilla Nurse was killed on her second birthday in Cape Town in September last year when the car she was sleeping in caught fire.

"There has been a recall to do with a window switch and 172,000 cars will be affected by the recall in the UK," a Honda UK spokesman told Reuters on Friday.

"The recall will start toward the end of February. Now we will start talking to customers and dealers as to how we set up that recall."

Honda UK said that water was entering the drivers' window of its Jazz model and reaching a master power switch, potentially causing the switch to overheat and "potentially cause fire."

"At the recall a waterproof skirt will be fitted to the window to avoid any damage," the spokesman added.

Honda's Jazz was its best-selling brand in South Africa in December, selling 352 units during the month.