Friday, October 30, 2009

Next Honda Civic will be delayed



Deep concerns in Japan that the global credit crisis structurally shifted the market in North America towards smaller and less-expensive vehicles led Honda to make major changes in its product plans late last year, likely delaying the arrival of the new Civic past its usual four- or five-year product cycle.

Honda CEO Takanobu Ito didn't provide a time frame for when the next-generation Civic would arrive, but told trade journal Automotive News that the team is having trouble meeting the revised deadlines.

Instead of becoming larger, as originally planned and as all new Civics have done with each new generation, Honda will instead make the car smaller, lighter and more fuel-efficient, while increasing perceived space inside.

The turning point for Honda last year was the collapse of Lehman Brothers in September, and the global credit crisis that followed, which reportedly prompted Ito to re-examine all upcoming product lines, leading to the killing of Honda's planned V-8 and rear-wheel-drive programs. This included an exotic sports car program that was close to its finishing stages, and would have competed with the recently introduced and very pricey Lexus LFA.

Any delay in the Civic could negatively affect the plant in Alliston, Ont., that produces all Civics sold in Canada except the Hybrid. Honda confirmed recently that an Alliston team was already in Japan working on plans for the next Civic, but they refused to provide a timeline for the new model's arrival.

However, the current Civic, going into its fifth model year this fall, still appears to have some sales legs to it; it's on course to remain the best-selling car in Canada for 2009.

The plant ran overtime shifts in September to keep up with strong U.S. and Canadian demand. But that was fuelled by the American Cash for Clunkers program, which rewarded buyers with government cash for trading in their older vehicles for newer ones, and provided an extra $1,000 (U.S.) cash ($4,500 versus $3,500) when buying vehicles that achieved 10 miles per gallon or better than their clunker.

Uncle Sam was basically bribing buyers out of their large SUVs and pickups into more fuel-efficient cars, with 89 per cent trading in a truck, and 59 per cent coming out of the transaction with a new car.

The Civic was the second-most-purchased new vehicle in the program, topped only by the Toyota Corolla, another fuel-efficient Canadian-made compact.

The Civic's design changes and potential delay also has implications for other vehicles built off the Civic platform, including the CR-V and boxy Element.

They and the Civic will become smaller, more fuel-efficient, and less expensive than planned, Honda CEO Ito said.

But there is still a concern here in North America that the move to smaller and cheaper vehicles seen over the summer and with last year's record fuel prices may not be seen again for a while.

"As long as gas is cheap (in North America), people want big vehicles," said Honda Canada PR manager Richard Jacobs.

Infiniti announces electric car plans


The Tokyo Motor Show was perhaps the most green-focused of major car shows yet, so it's perhaps not surprising that Nissan CEO used the show to confirm Infiniti will sell an all-electric vehicle, to accompany the mainstream Nissan Leaf hatchback the company plans to start selling in Canada in the second half of 2011.

Few details were made public about the planned e-Infiniti, except that it will be a stylish, four-passenger high-performance, compact vehicle with zero emissions.

This suggests that it will be a re-bodied version of the Leaf, with a more powerful or higher-capacity battery, rather than a production version of Infiniti's Essence concept, which the brand t introduced earlier this year at the Geneva show.

The organically sculpted Essence was a large two-seater, 592-hp, rear-drive hybrid that became the undisputed star of that show. The concept has featured prominently in Infiniti's advertising since then, especially in the United States, fuelling speculation that the vehicle is on its way to production.

However the all-electric Infiniti looks, it will also be a part of another electric initiative launched this month by Nissan and corporate conglomerate Sumitomo to collect, resell and recycle old electric car batteries.

The partners suggest there will be at least 50,000 electric car batteries available for large-capacity power storage devices by 2020 in Japan, and hope to resell the batteries for various industrial uses.

Plans are now being drawn up for a separate joint venture corporation in Japan and the United States between Nissan and Sumitomo, which is expected to be up and running by the end of 2010. European plans are still up in the air, but Nissan said it is consulting with its alliance partner Renault to study a similar type of venture there.

Perhaps even more important than the potential new market venture, Nissan also wants to assuage planet-conscious consumers that the lithium-ion batteries planned for its upcoming family of electric cars won't simply add different environmental problems to the earth's woes than fossil fuels.

Car of the Year testing this week

The Automobile Journalists Association of Canada will announce the 12 category winners tomorrow after AJAC members test-drive the vehicles competing for Canadian Car of The Year honours at the group's TestFest competition.

The 12 category winners will then be eligible for the 2010 Canadian Car and Utility Vehicle of the Year awards, which will be handed out at the Canadian International Auto Show in February in Toronto.

The Best New Technology and Best New Green Technology awards will be announced Jan. 11 at the Montreal Auto Show.

Once again, all the results from the competition will be posted on the association's public site at http://www.ajac.ca, making it a very handy research tool for buyers.

You will also be able to find the list of winners on the Globe's new globedrive.com website when it launches on Monday.

Don't like a picked winner? The detailed results on the AJAC site will help you go back and see the strengths and weaknesses of the cars that most interest you.

Plug-in hybrids provide 'green halo'

Even those willing to pay more money upfront to buy a plug-in hybrid electric vehicle (PHEV) will want to be able to make up the difference over time, concludes a study released at a conference in Detroit last week.

"As the premiums for PHEVs doubled from $2,500 to $5,000 and doubled again to $10,000, there was a uniform decline in purchase probabilities across all of the socio-economic characteristics measured," found the University of Michigan/Reuters study.

"The average purchase probability at the (U.S.) $10,000 premium fell by 70 per cent to just a one in seven chance of purchase from nearly a one in two chance at the $2,500 premium," with more than half of those surveyed saying there's no way they'd consider a plug-in hybrid that required an extra 10 grand.

However, there was a significant "green halo" effect found from potential buyers interested in more than simply economic reasons for buying plug-in hybrid vehicles. In fact, it is the positive social and environmental social feedback provided by the purchase of the first few plug-in hybrid vehicles that will help spark further interest in PHEVs, and therefore make them more appealing and affordable to the larger masses of mainstream buyers who are more interested in the economic bottom line.

source: theglobeandmail