Honda’s new hybrid takes on the Prius

It’s not often that Honda messes up. But this month’s launch of its first hybrid-only car, the 2010 Insight, marks a complete about-face on its hybrid strategy.

Until now, Honda has only offered hybrid versions of existing models, such as the Civic and Accord, and it has watched in horror as Toyota’s hybrid-only Prius stole the show. With annual worldwide sales of more than one million cars, the Prius is by far the bestselling hybrid, while the Accord hybrid flopped so badly it was discontinued in 2007.

The new Insight, which launches at the Detroit Auto Show next week and goes on sale April 22 (which is Earth Day), is designed to change all that. Details have leaked out indicating that the Insight will be a five-door hatchback with a 4.7 litres/100-km city (4.3 highway) fuel economy, a three- or four-cylinder gas engine with electric engine assist, and a nickel-metal hydride battery.

What’s most striking about the vehicle is how closely it resembles its rival, the Prius. Both cars have a sloped front and stubby rear and offer lots of cargo space. Marketing experts say Honda mimicked the Prius design to ensure that the Insight—which even boasts a feedback feature to tell drivers how green-friendly their driving style is—would be instantly recognizable as a hybrid.

Al Ries, a consulting marketing strategist in Roswell, Ga., says the Insight will have its work cut out for it. Toyota’s Prius has already become synonymous with the word hybrid, and there’s only room for one leader. But Honda seems to be gearing up for war, and its first attack is to undercut the Prius’s $27,000 base price with a starting price that may be less than $20,000. It reportedly hopes to sell 200,000 Insights a year—which is more than the Prius sells now.

“If Honda can market it for less money in this environment, that’s a big advantage,” says Ries. “I think it’s their only option.”