Honda weighs safety cuts to qualify for energy rebate

[2961883]

http://www.canada.com/ottawacitizen/...4-8160fb9c9fc8

Honda weighs safety cuts to qualify for energy rebate
Gear could be lifted for fuel efficiency; 'But $1,000 for a human life?' executive asks
Chris Vander Doelen, The Windsor Star
Published: Friday, April 06, 2007

WINDSOR - Honda Canada Inc. is "seriously considering" stripping some life-saving safety equipment out of the smallest car it sells in Canada to meet new federal fuel efficiency ratings.

The Honda Fit does not qualify for a $1,000 rebate under the new rules, announced in the federal budget two weeks ago, while the Yaris, produced by arch-rival Toyota, does.

The difference can be explained by the extra air bags, side curtains, antilock brakes and other equipment the Fit has, but the Yaris does not, says Jim Miller, executive vice-president of Honda Canada.

"If we stripped all that out, it would qualify," Mr. Miller told a University of Windsor marketing class.

"But $1,000 for a human life?"

The Fit consumes 6.5 litres of fuel every 100 kilometres, which is the cutoff point for the new federal incentive to buy fuel-efficient cars. The Yaris consumes 6.3 l/km and qualifies for the money.

Most of the subcompact cars on the Canadian market, which account for more than half of all sales in this country, achieve mileage similar to the Fit.

Honda, which prides itself on the tiny Fit's five-star U.S. crash safety rating, doesn't want to trade safety for sales, Mr. Miller told about 80 students and area automotive business people.

But it might have to.

"Do we give that up? I don't think from a corporate social responsibility point of view we should," he said of the car's five-star rating.

"But obviously, to remain competitive, we're giving it serious consideration." He said Honda can't afford to walk away from as many as 20,000 units of sales in a crucial segment of the business, handing them to its most important competitor. Honda doesn't lose many sales to the Detroit Big Three, mainly to Toyota, he said.

"It's going to have an impact" on Honda's sales, he said of the federal incentives, although it is too early to tell how much.

Mr. Miller said the federal government's new green levies, or "feebates" as some have called its new taxes and rebates, may be too arbitrary to have the desired environmental effects on the marketplace.

Toyota, whose customers some analysts say stand to pick up the bulk of rebates from the new federal program, is the only automaker that has wholeheartedly endorsed the budget announcement.

Stephen Beatty, managing director of Toyota Canada Inc., told the same University of Windsor class on Monday that the company was delighted with the federal budget provisions.

[Anessa]

That's so dumb...

[rfdrfd]

Then Honda can use that to advertise to compete against Yaris. Get $1000 rebate, but do you want a less safer car?

Looking at their sales numbers this past year, I'm sure Honda doesn't need to make they cars qualify for the rebate to get more sales.

People will buy Honda's for what it gives: brand, engine, sportyness, reliability, safety, resale value, and more.

Something non-Japanese car makers cannot achieve, so they would have to try to make the rebate limit to get more sales.

I guess if they are trying to compete with Toyota, then sure, that makes sense. But the Honda name still means more in "Racing" or "Sporty" when compared to Toyota, at least IMHO. Civic is the #1 seller in N.Am. for the younger crowd, not Corolla.

[actng]

Toyota is Honda's biggest competitor???

In theory I can see how that's true. Both are cheap... both are Japanese... but I have not known a person who was deciding between a Civic or a Corolla. To me those are VERY DISTINCT markets.

If I were Honda, I would sell a green Fit. No, not the colour green. Have an environmentally friendly line of Fit that qualifies for that rebate (perhaps entry level minus all the safety equipment.)

Seems easy enough of a case study! ...or am i missing something?

[malaco0219]

Toyota is Honda's biggest competitor???

In theory I can see how that's true. Both are cheap... both are Japanese... but I have not known a person who was deciding between a Civic or a Corolla. To me those are VERY DISTINCT markets.

If I were Honda, I would sell a green Fit. No, not the colour green. Have an environmentally friendly line of Fit that qualifies for that rebate (perhaps entry level minus all the safety equipment.)

Seems easy enough of a case study! ...or am i missing something?

I agree. Rather than stripping out the safety implementation just to qualify for the rebate, i think they should have a green Fit instead. I'm awfully surprised though the fit is off by so little. Perhaps if they had a 2 door version where less material is used, and thus with less weight, may it qualify?

[rfdrfd]

I think Honda is still trying to gain back the grounds it lost on the Hybrid race. Toyota has a Prius, which is world known, and Honda doesn't have its "Insight" anymore.

[malaco0219]

I think Honda is still trying to gain back the grounds it lost on the Hybrid race. Toyota has a Prius, which is world known, and Honda doesn't have its "Insight" anymore.

wow.. imagine a Hybrid Fit.

I think that would be cool, but whether it will work is a diff story

[Anessa]

They should put some carbon fibre and aluminum. That'll lighten the load and appeal to the tuner crowd

[belfour]

The Fit's engine is the old Vtec (not i-Vtec).... so is the design.

A brand new Hybrid model will be coming in 2008~2009

[gordholio]

Sure, Honda could sell a cheaper fit with just front air bags and no extra ones or ABS.
Lots of cars just have front air bags and nothing else.
Safety comes mostly from how you drive.

I don't understand though - are the extra air bags and ABS adding weight and causing the car to get worse mileage?
If that's the case, they could cut weight in other areas as well.

They could put in a less powerful engine - I had a car back in 1988 - a Dodge Colt - weighed 1900 lbs and had a 68 hp engine, yet still didn't feel sluggish at all and got 43 mpg.

[tidus888]

it will be funny if Honda makes a new trim for the energy rebate.

LOL

like... Honda FIT ER edition..

the only reason why i think honda would consider that.. is because they will have a new plant in north america for building the FIT... so... everything can be localized..

[ullyeus]

Honda should consider this, let the consumers decide what they want.

[KnifeEdge]

Honda should consider this, let the consumers decide what they want.

then why not offer everything as options ? would you like three or four tires on your vehicle, would you like brakes ?? steering ?? get my point ??

The fit has awesome safety rating stock, no options added. The competitors cant say that since most if not all only offer safety equipment such as airbags and abs as options which closes the gap in price between them and the fit. Toyota for one markets their Yaris with the extremely low base price, but if you want anything near the amount of kit that's in the fit the price differential becomes nil.

Honda COULD just strip all the airbags out of the fit, qualify for the rebate and then offer the airbags as options but that's not what Honda is about. The keyword in that article is social responsibility. You cant always trust the consumer to decide what's best, it's same reason why we get free healthcare, cuz we pay out our asses in taxes.

The answer isn't as simple as it may seem since $1000 is quite a big incentive in this market segment. But I firmly believe that it isn't enough to justify deleting standard safety equipment from both consumer and a corporate point of view. I would suggest they try to fiddle with the gear ratios to get a better highway rating expecially on the MTs which have a short 5th gear. Without more information though all this is just guesswork. The taller gearing will make the car less peppy but will achieve better fuel economy, like someone has mentioned before this could be under a new trim level or a transmission choice on all trims.

[and or]

Safety and fuel efficiency (and cost) are always a trade-off in car design -- otherwise everyone would drive tanks.

[seftonm]

Sounds like Honda is looking for the easy way out. Fine tune the engine, transmissions, and aerodynamics and they should meet the goals.