Editorial: In Search of: Honda's Hybrids

Once upon a time, Honda represented everything that Detroit was not. Efficient, lean, reliable and most of all, innovative. While The Big Three soldiered-on with the same powertrains for decades on end, Honda constantly renewed, redesigned and released cars that genuinely improved their customer’s lives. Profits and widespread admiration followed… until the Honda hybrids came along. Then Honda, long regarded as the technology leader, got its ass kicked by Toyota. What happened?

The 1999 Insight was an absolute masterpiece of technology. Honda coupled a 70 hp. 1.0L engine (with an air fuel ratio of 25.8) to a 13 horsepower electric motor. It was ‘Wow!’ technology back in the Clinton Era. At only 1847 pounds, with a wind whispering 0.25 Cd, the Insight generated exceptionally high fuel economy numbers (70/61) for their customers. What customers? This was an especially difficult question to answer as the Insight was not ready for prime time.

The ‘Integrated Motor Assist’ technology wasn’t the problem. Simply put, the Honda was a niche vehicle. At the turn of the century, with gas at a buck a gallon, the high-tech fuel-miser niche that was so small that the Insight literally offered a zero carbon imprint on dealer’s lots.

Honda optimistically projected 6500 sales for for the model year 2000 Honda Insight. Dealers unloaded a measly 3805 units during the hybrid’s first full year of release. And that was the high water mark. Worse, the sales failure killed the Insight’s evolution. For seven full years, the model’s design and technology became stuck in neutral, with limited modifications. That was where the real tragedy for Honda took shape.

While Honda was initially content with having a long model run and a limited market, Toyota had other plans.

When the first generation compact Prius was released in Japan in 1997, Toyota’s Corolla had officially become the world’s best-selling vehicle. The Prius was designed as a hybrid-only model from Day One. Toyota fully redesigned the Prius in succeeding generations to accommodate the changing nuances of the hybrid buyer.

At first the Prius failed. It racked-up just 5562 U.S. sales in 2000. Even as gas prices rose, both Toyota and Honda were besieged with anti-hybrid issues and innuendos. Both companies had to deal with the financial fears associated with battery packs. Warranties were extended, and some customer assistance was offered.

But Toyota– not Honda– used adversity as a PR tool. Before long Toyota was highlighting battery failures in 56 degree below zero Arctic weather and proudly proclaiming that no other battery had ever needed to be replaced. It wasn’t factually correct (a.k.a. complete bullshit) but the story played well with the general public.

By 2003, Honda was putting the same technology in the Insight (with minor modifications) into the Honda Civic. They gave the conversion more torque, an extra 300cc’s of displacement and a bit more engine heft. Speaking of heft, at 2700 pounds, Honda’s CVT transmissions would now power a vehicle that was nearly 850 pounds heavier than the Insight.

It didn’t take long before Consumer Reports and a rash of owner review sights began to highlight the very expensive and frequent transmission work requireed to keep the Honda Civic hybrid on the road. After a few battles, Honda upped the transmission warranty to 100k and agreed to replace or modify components in the hopes of avoiding the inevitable. Unfortunately, with cases of third and fourth transmissions being replaced within 100k, the Civic Hybrid began to lose serious traction with the public.

While these Civics sat with their Taurus quality transmissions, the Prius was garnering reliability awards from J.D. Power, Consumer Reports, and was quickly becoming the de-facto poster child of a mass ‘hybrid’ market. Honda had abandoned a sheetmetal design projecting their hybrid model’s green, high-tech, Space Age credentials (albeit in a less-than-practical two-seater) for a mass market clone car. The Prius’ shape morphed in the exact opposite direction, from flat-line Echo cardiogram to an Insightful hybrid statement.

With gas prices in the upswing, the Prius’ aspiring hypermilers and the eco-conscious consumers were soon joined by those simply looking at the economic proposition of ownership. By 2005, with a second ground-up redesign, the Prius passed 100k annual sales, heading for over a million hybrids sold worldwide by 2007. In the same year, Honda would sputter-out only 32k Civic Hybridss, 3400 Accord Hybrids), and three of the now defunct Insight. Honda now had a full fledged failure on it’s hands.

Beneath the skin, much of Honda’s failure in the hybrid market can be traced to the same shortsightedness and bad customer support that’s afflicting the Detroit Big 3. The depressed valuations and bad owner reviews for the past Honda Hybrids will undoubtedly make the 2010 Honda Insight a far tougher sell.

Should Honda offer a stronger warranty on their new vehicles? Should they simply recall the defective transmissions and offer a longer warranty for current owners? It’s easy to say yes. But every automaker has to draw their own line is between taking care of the customer, and taking care of the bottom line.

As these pictures demonstrate, Honda is determined to take-on the Priora of the world with a kick-ass hybrid. That isn’t afraid to look like a knock-off of its direct, perhaps only competitor. Priced to go. With (one hopes) brand-faithful reliability. Even so, Honda will need to figure-out how to take on a rival who kept their product exclusively focused on a very unique and evolving customer. As Honda and The Bailout Big 3 are learning, the road to redemeption is long and perilous, with persistence, determination and humility providing the best chances of success.