After becoming the first company to bring a hybrid to the U.S. masses, Honda learned a painful lesson in economics as it saw its pioneering Insight model fail to generate sales and fall to the more popular Toyota Prius.  Since that disappointment, Honda has bided its time and now it is ready to strike back.

Previous reports indicated that Honda might bring back the Insight in 2010.  In the meantime, it has been enjoying rejuvenated sales of its Civic Hybrid and is forging ahead with its fuel cell hybrid efforts with the 74 MPG-equivalent Clarity FCX concept, which has been deployed at last to a fortunate few testers in California.  Slowly leaking plans also indicated that Honda might deploy hybrid versions of the Fit and CR-Z sports coupe next year.

New announcements and inside sources from Honda have at last added some clarity to Honda's hybrid plans.  The five door hatchback, which had been previously been labeled the "new Insight" will indeed launch next year.  The CR-Z hybrid coupe will come in early 2010 and the new Honda Civic hybrid will come in late 2010.  Finally, in 2012 the Fit hybrid will finally arrive.

While the longer waits on the CR-Z and the Fit may disappoint some, the reports on the hatchback prices won't.  Early reports pegged it at around $22,000, but more recent inside sources report the price will be a much lower $19,000.  The vehicle is expected to be a strong performer, beating the Prius in fuel economy, getting 60 MPG on average according to the source.

The new vehicle is currently code named the "New Dedicated Hybrid Vehicle" or simply "small hybrid".  Its true name will be revealed at the 2008 Paris International Auto Show in October.  The inside sources say that the new model will not be an Insight, but will bear a new name.  Photos of near production test vehicles have been leaked and show a great deal of similarity to the Clarity FCX.  The final production version will be unveiled at the 2009 Detroit International Auto Show and the vehicle will launch on Earth Day, April 22, 2009.

Honda's latest sales strategy aims to sell 500,000 hybrids a year by 2010, which would equal 10 percent of its projected sales volume.  Honda aims to sell 200,000 of the new hatchback in Japan.  Dick Colliver, executive vice president in charge of sales and marketing for American Honda Motor Co added details on North American targets stating, "We're targeting sales of 100,000 units of this new vehicle in North America."

The new model seems well-positioned as the new Prius, launching in 2010 is expected to be priced even higher than previous models and will have more power, bigger size, and additional luxury features.  However, early reports indicate it may be unable to beat the Honda hatchback's fuel economy, despite the steeper sticker.

Low prices on the new Honda model are thanks in part to a cheaper improved hybrid platform.  The platform uses an affordable nickel metal hydride battery pack.  It also features a smaller, lighter version of the 1.3-liter IMA system found in the current Civic hybrid.  The new vehicle uses many common body parts with the non-hybrid Fit, also lowering costs.  It will be built in Honda's Suzuka plant in Japan, but production may be outsourced to China to lower costs.

Of the 200,000 yearly units Honda plans to produce, after the 100,000 for North American markets, 50,000 will be sold in Europe with the remainder sold in Asia and elsewhere.

Honda's CR-Z is now estimated to carry a slightly steeper price tag -- $25,000 -- while offering unspecified "sporty" performance.  Overall it can be noted that Honda's efforts, while extensive, fall short of Toyota's goal to build a million hybrids a year by 2012.

In the long term Honda is focusing on fuel cell technologies.  While the company realizes commercial applications remain distant, it sees them as the ultimate destination.  Said Mr. Colliver at a conference sponsored by the Center for Automotive Research in Traverse City, Michigan, "For the long term, we continue to see the development of fuel cell vehicles as the ultimate solution.  While this technology is more than a decade away from the mass market, we know it works because we've been advancing it in the real world with real customers.  We know directionally if we can develop the infrastructure to support that car and we can get the volume out of it, it's a true direction we can go for new fuel efficiency as well as reducing greenhouse gasses."

Honda's solutions will soon be going head to head with a new American competitor as well, the Chevy Volt, which is set to debut in 2010, offering a plug-in experience, albeit at a higher price tag.