Major automakers in Japan are competing fiercely to get their share of the hybrid car market pie.  Competition between the leaders in hybrid cars – Toyota and its rival Honda – is now set to intensify as both the companies are preparing to launch their new hybrid car models next year.   This is going to lead to a price war which would help the help to increase popularity of hybrid cars in Japan.  As per the latest news from Nikkei Business Daily, Honda’s new two-seat hybrid car CR-Z will cost just around US$16,750 (1.5 million yen), which would make it the cheapest hybrid car in Japan.  CR-Z will be available in the market from autumn this year.

CR-Z — which stands for Compact Renaissance Zero — is a two-seater gasoline-electric hybrid car, which is lively and comfortable and comes with CVT (continuously variable tranmission) as well as manual transmission.  In spite of its low price tag, the Honda CR-Z doesn’t look or feel like a cheap, thrifty car.  The new hybrid from Honda has fuel efficiency of 30 km per liter (34 miles per gallon) of gasoline, compared with the Fit’s 24 km per liter.

The design of Honda’s new hybrid car CR-Z will be based on its gasoline powered compact car Fit, and will share core components of its hybrid model Insight – in order to reduce the development costs.  As a result, the new hybrid car will cost about US$4,400 (400,000 yen) less than Insight hybrid, and about US$2,200 ( 200,000 yen) more than Honda Fit.  With this move the  Honda CR-Z  will cost 20% less than the cheapest hybrid car in the Japanese auto market today.

This price war will put both the car makers – Toyota and Honda – at a disadvantage when profit margins are concerned.  However, when hybrid cars would be available in the normal price range of gasoline powered cars and can offer a performance better than the conventional cars powered by gasoline, hybrids are going to be popular even if the government offers no tax incentives.

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