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Honda Set to Kill Off Insight Hybrid

Maker shifting focus to new generation of hybrids.

by on Feb.26, 2014

Honda CEO Takeo Fukui (l) was one of those celebrating the introduction of the latest Insight hybrid.

It appears Honda finally is ready to end production of its dedicated Insight hybrid-electric vehicle as the Japanese automaker moves to address some long-festering problems.

News reports from Japan indicate Honda executives have finally pulled the plug on the latest version of the Insight, the successor to Honda’s first hybrid model originally introduced in 1999.

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The likely demise of the Insight has been the subject of rumors for months and appears to reflect Honda’s inability to generate much consumer interest in the model which was once seen as the maker’s answer to the Toyota Prius.  Toyota’s hybrid was the best -selling vehicle in California last year and dominated sales charts in Japan, as well, while the Insight was never in the hunt.

The original, 2-seat Honda Insight.

Honda had high hopes for the second-generation Insight when it debuted in 2009.  Unlike the quirky original, a teardrop-shaped two-seater, the latest model adopted a more conventional design and offered a back seat.  It also came in at less than $20,000, well below the price of the Honda Civic Hybrid.

But the more traditional look may have hurt the Insight, especially when compared to the distinctive and easy to recognize Prius.  Despite solid fuel economy, meanwhile, the Insight got thumbs down from many reviewers for its tame performance and lack of features.

One of the biggest differences between Prius and Insight, meanwhile, is the fact that the Honda model cannot run in battery-only mode, even for short distances.

(Click Here to see which Honda model was named one of the year’s best cars for the money.)

Over the past 15 years, Toyota has sold 3.19 million copies of the Prius, while Honda has sold roughly 281,000 Insights. And though the numbers are skewed a bit, since the Insight nameplate was out of production for several years, Honda’s offering has clearly failed to generate much momentum.

Making matters tougher for Honda, there’s been growing competition for hybrid sales as makers as diverse as Ford, Hyundai, Nissan – and even luxury brands such as Mercedes-Benz — have pushed into the segment.

The Insight, meanwhile, has become something of a technological anachronism for Honda which has developed a trio of new hybrid drivetrain systems since the Insight debuted.  The most basic, single-motor system used in the latest-generation Honda Civic Hybrid adds battery-only mode and boosts performance over the old Integrated Motor Assist system used in Insight and older Honda hybrids while delivering even better mileage.

Honda also has launched a two-motor hybrid available in the Accord model – which helped that model win accolades as 2014 Green Car of the Year last November.  A three-motor hybrid system designed to boost performance, as well as mileage, is in the midst of being rolled out on various Acura models, including the Honda luxury brand’s flagship RLX model and the soon-to-return NSX supercar.

(Honda lands two models in Consumer Reports’ Top 10 Picks for 2014. Click Here for more.)

Facing increasing competitive pressures from revived American and German competitors in the critical U.S. market, Honda also announced several executive changes and appointments.

Takuji Yamada will become president of Honda North America, Inc., COO of North American Regional Operations and president & CEO of American Honda Motor Co., Inc. Tetsuo Iwamura, the curent president of HNA and COO of North American Regional Operations, will assume the newly created position of Corporate Brand Officer for HMC to strengthen the management of all corporate brands.

Erik Berkman, currently president of Honda R&D America, will become an executive vice president of HNA and division manager of the new Acura Business Planning Office. Berkman’s new job will be to revive the Acura brand’s passenger car lineup which has continue to lose ground to its upscale rivals.

Acura sales grew last year, but largely due to the success of the new Acura MDX sport-utility vehicle.  Despite the launch of the new RLX flagship and the entry ILX model, the brand’s passenger car sales slipped by 10% as rivals such as BMW, Mercedes-Benz and Audi expanded their sales to affluent American consumers, looking for luxury, expressive designs and flair.

(Honda kicks off production of Fit subcompact at new Mexican plant. Click Here for the latest news.)

Frank Paluch will replace Berkman as president of Honda R&D Americas, Inc. and as an operating officer of Honda R&D Co., which is playing an increasingly important role not only in North America but around the world.

(Paul A. Eisenstein contributed to this report.)

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