Honda Motor Co. may miss its U.S. sales target for the Insight hybrid because cheap fuel and consumer reluctance to buy cars amid the recession are hampering its efforts to loosen Toyota Motor Corp.'s grip on the green market.
Sales of Honda's gasoline-electric Insight, which debuted at U.S. dealerships in late March, may fall short of its initial sales goal by a third in the model's first year, John Mendel, the company's U.S. executive vice president, said in a recent interview.
"In a normal year, we're thinking we were right with our forecast," Mendel said at Honda's U.S. headquarters in Torrance, Calif. "Given some dramatic change in things, I don't think we'll get to 90,000. At 50,000 to 60,000, we will be just fine."
Lower than planned U.S. sales for the Insight, touted by Honda as the most affordable hybrid in the U.S., contrasts with demand for the car in Japan, where in April it was the first hybrid to lead monthly sales. Gasoline prices in Japan, 78 percent higher than in the U.S., also helped make Toyota's new Prius the country's top seller last month.
U.S. consumers paid an average of $2.64 for a gallon of gasoline on June 12, 35 percent less than a year ago, according to AAA's Daily Fuel Gauge Report. By comparison, retail prices in Japan are equivalent to $4.69 a gallon, the Tokyo-based Oil Information Center said on its Web site last week.
"Sales of hybrids have a strong correlation to gasoline prices, especially in the U.S.," Koji Endo, an analyst at Credit Suisse Securities (Japan) Ltd., said. "And Toyota's Prius has had more customers in the past, so it's a tough competition for Honda."