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http://www.nj.com/printer/printer.ssf?/ ... t=business

Honda to discontinue hybrid Accord sedan

6/5/2007, 8:12 p.m. ET
By BREE FOWLER
The Associated Press [spacer.gif]

NEW YORK (AP) -- With gas prices reaching record high levels and increasing public interest in environmentally friendly technologies, you would think that any car labeled as a hybrid would sell easily.

But Honda Motor Co. on Tuesday announced that it will discontinue the hybrid version of its Accord sedan, citing disappointing sales.

Analysts said that despite the Accord's superior performance compared with some of its higher-volume competitors, it just doesn't fit with the current consumer demands for the smallest, cheapest hybrids with eye-popping fuel economy.

Brian Chee, an analyst with the vehicle research firm Autobytel.com, said the Accord's relatively low fuel economy and high price tag compared with other hybrid vehicles made it a tough sell.

"It was a pretty perky performance car that it was fun to drive, but it was expensive and it was not exactly what people were looking for as far as a hybrid," Chee said. "It was a clean-burning performance vehicle, but people wanted a hybrid with fuel economy."

The hybrid Accord gets an estimated 28 miles to the gallon in the city and starts at about $31,090, while the hybrid version of the company's smaller Civic sedan gets about 49 miles per gallon and starts around $22,600, according to Honda's Web site.

By comparison, Toyota's market-leading Prius model gets an estimated 60 miles per gallon and carries a $22,175 price tag, and the Toyota Camry hybrid gets about 40 miles per gallon and has a $26,000 sticker price.

"The Accord gets good mileage and that's just it. Hybrids have to get great gas mileage in order to sell," Chee said.

Honda, Japan's No. 2 automaker, said it will keep making the hybrid version of the Civic but stop offering the hybrid Accord after the new model expected to go on sale later this year.

In the years since its debut in 2004, Honda sold a total of 25,000 hybrid Accords, and just 6,100 last year.

In comparison, it has sold more than 153,000 of the Civic hybrids since they went on sale in 2001 in Japan, Europe and North America.

Meanwhile, demand for Toyota Motor Corp.'s market-leading Prius hybrid has taken off, with 729,800 units sold since December 1997. The
company also has sold 53,681 of the Camry hybrids since they hit the market in May 2006.

Bill Kwong, a spokesman for Toyota, said that while the Camry sedan has not produced the same sales volumes as the Prius, Toyota officials are happy with its sales performance and have no plans to take it off the market.

Kwong said the Camry has had more sales success than the Accord because of its lower sticker price and more fuel efficient four-cylinder engine, compared with the Accord's more powerful, but
less efficient, six-cylinder engine.

Brett Smith, senior industry analyst at the Center for Automotive Research in Ann Arbor, Mich., agreed that the Accord's price and fuel economy hurt its sales, but said it also remains unclear exactly how much demand there is for hybrid vehicles overall.

"Certainly there are those who are interested in hybrids and think fuel efficiency is good thing, but it comes down to willingness to pay for it," Smith said.

Smith said that as a hybrid vehicle's premium over its traditional gas model increases, the number of people willing to pay that premium
decreases.

Chee said General Motors Corp.'s "aggressive" entrance into the hybrid market also could shake things up.

GM said Tuesday it would introduce four new hybrid models this year:
two-mode gas-electric systems in the Chevrolet Tahoe and GMC Yukon large sport utility vehicles, and hybrid systems for the Saturn Aura and new Chevrolet Malibu sedans.

Smith said GM is billing the SUVs as no compromise vehicles that will provide the power and performance SUV drivers have come to expect, but it's too early to tell if they'll catch on with consumers.

As with other hybrids, sales of the SUV models will depend on the automaker finding the right mix of power and fuel economy to attract buyers, he said.

Chee said he thinks there's a market for the larger hybrids, even if the fuel savings is minimal.

"A lot of people buy large vehicles because they need to tow and they need to haul people as well," Chee said. "I think anybody who owns a large vehicle is going to appreciate any fuel savings and they're going to be willing to pay for that.
 

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Doesn't surprise me. I still think if they'd build the Accord hybrid on the new body style with a 4cyl engine and make it get high 30's maybe low 40's mpg wise they'd sell a decent number of them.
 

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If Honda had put the IMA system on the 4 cylinder Accord, it might have sold well. As it is the Accord dropped 16% to 439 units compared to a year ago. I believe Honda was trying to compete with the Lexus hybrid which is taking an even bigger beating than the Accord. Last month Toyota sold only 181 GS 450h sedans (down 38% from May 2006). It seems Luxury car purchasers couldn't care less about the cost of fuel, when they are spending twice as much as the average person to buy a car that has twice the power they really need. :roll:

Honda is replacing the hybrid engine with their whisper Diesel. Honda has put a lot of reseach dollars into what is arguably the worlds best Diesel. Perhaps that will be the "killer application". Personally I feel that Diesel has run its course and should be soon replaced by other engine designs that Honda is currently working on, such as the compression ignition gasoline engine.
 

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I'm not surprised by either the Accord or the Lexus.

People who can afford to spend $35-40,000 on a luxury car DON'T CARE about saving money at the pump. They've got money to burn.

And people who DO care about saving money, aren't going to buy a car that is double the price of an economical civic or yaris.



I've always thought a hybrid that only gets ~35mpg was a bad idea. Many Accords/Lexuses get that economy just by using a smaller engine.
 

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"People who can afford to spend $35-40,000 on a luxury car DON'T CARE about saving money at the pump. They've got money to burn."

I don't know about that. I think it's not so much having the money, as having an attitude. I dare say a good many of us here could pay that much, or more, for a car, if we wanted to, and keep the tank full without hardship. But we choose not to.
 

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I'm with James. There are people out there who fall somewhere in between. My dad cares greatly for the environment, but at the same time wants a luxury vehicle. He regularly curses the mileage he gets in his 540i, but still isn't quite keen on Japanese cars.

Who would be after having fruit, garbage and rocks thrown at you simply for riding a Honda motorcycle in the 1970s? He is coming around though -thanks in part to our Insight.
 

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Yes but those types of people are not enough in number.

Hence the poor sales.

Hence the cancelation of the car.
 

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Wonder if the HAH was really just a flexing of Honda's corporate engineering muscles. "Look, we can use hybrid technology to make this super high mpg Insight on the one hand and this powerful Acura-like Accord on the other!" Maybe they were just testing the waters and didn't really expect to sell a lot of them. But I think in the end the HAH made Honda look a bit disconnected from the realities.
 

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ElectricTroy, I wasn't saying there was not enough of that particular type of consumer out there. I was just saying that people who care about luxury also care about saving a bit at the pumps. Hence the Lexus hybrids, which seem to be a decent compromise.

We'll have to see how well the Lexus GS and LS hybrids sell. Maybe you're right, and they'll soon be a part of history too.
 

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As I mentioned above," Last month Toyota sold only 181 GS 450h sedans down 38% from May 2006". It would appear that the Toyota's sales of luxury hybrids is going down faster than the gas in a Hummer. On the surface it appears the rich are more interested in accruing assets than buying a token planet saver. Perhaps they are buying a Prius, or a Tesla. ;) Sadly, I've observed that Troy's opinion is valid when I have talked personally to the unconverted rich. :cry:
 

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Maybe it's me - I guess I'm not being very clear and I don't think people are understanding what I'm saying.

I simply stated that people who care about luxury DO care about the environment, IE my father. However, it seems to be true that there aren't enough of those buyers out there, which is too bad. I've always thought the Accord hybrid was a contradictory type of vehicle and I don't understand Honda's plan behind it, and yeah, it totally made them look "disconnected from the realities" as red1dr put it.

Were they testing the waters? That's a lot of money to waste just for testing. Did their plan backfire in their face? Doesn't usually happen with Honda. Were they just trying to beat Toyota in the luxohybrid race? Will we ever know?
 

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Aw crud - sorry b1shmu63 - just realized what you were saying when I re-read your statement about the 'unconverted rich'.
 
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