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Old 06-08-2007, 01:00 PM
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Arrow Honda drops Accord hybrid

Honda scraps Accord Hybrid due to poor sales

When Ken Oliver looked to buy a hybrid, picking the Honda Accord over the Toyota Prius was an easy choice.

"There was no comparison in my mind," Oliver said. "The Prius was boxy and handled poorly. It didn't have the acceleration."

So he bought an Accord hybrid with leather seats in May 2005. Two years later, he considers himself a satisfied owner who gets "exactly" 30 to 30.5 mpg.

"In my estimation, the car is terrific," he said.

But there apparently are too few people like Oliver, who commutes daily from his Morgan Hill home to Covad Communications in San Jose.

On Tuesday, Honda said it would drop the Accord hybrid from its lineup after the 2007 model year.

The decision wasn't a surprise, as sales of the Accord hybrid have been tepid since it arrived in 2004. Most analysts blame the model's failure on Honda's decision to pair electric components with a V-6 engine instead of with a higher-mileage four-cylinder gasoline motor.

In the United States, Honda dealers sold just 5,598 Accord hybrids last year, and just 439 last month. Rival Toyota sold 24,009 Prius hybrids in May, the car's best sales month in history, and 106,971 in 2006.

"The cancellation of the Honda Accord hybrid points out the fact that hybrid manufacturers have largely been unable to expand the public's perception of hybrids beyond high fuel economy," said Jack Nerad, executive market analyst for Kelley Blue Book and its kbb.com Web site.

The 2007 Accord hybrid gets 28 mpg in the city and 35 mpg on the highway, according to the government's http://www.fueleconomy.gov Web site. Toyota's Prius gets 60/51, and its Camry hybrid gets 40/38. The EPA will change its fuel-economy formula for 2008 models, and all mileage numbers are expected to decrease.

Not only did the Accord not get the fuel economy of the Prius, it was more expensive, too. Suggested price of a 2007 Honda Accord hybrid is $31,685, according to kbb.com, vs. $22,795 for a Toyota Prius and $26,820 for a Toyota Camry hybrid. And the Accord hybrid never qualified for single-occupant carpool-lane stickers in California because it didn't achieve the state-mandated 45 mpg.

"When it first came out, it was a unique direction," said Sage Marie, a spokesman for American Honda. "It was the first of its kind, a V-6 hybrid." It also was the fastest production Accord ever built, he said.

But when Honda introduced a new hybrid version of its redesigned Civic in 2006, Accord hybrid sales sank. Compared with the Accord hybrid, the Civic hybrid is cheaper, gets better gas mileage and did qualify for carpool stickers.

The Civic, Marie said, "is where the market has gone. It's really the sweet spot."

Honda will offer a redesigned version of its mid-size Accord sedan and coupe later this year, but without a hybrid model.

Honda dropped another hybrid, the two-seat Insight, in 2006.

That leaves it with just one hybrid, the Civic, at a time when that market segment continues to bloom. R.L. Polk, a market research company, said today that U.S. hybrid sales grew 31 percent in the first quarter of 2007 to 74,056 units from 51,285 during January-March 2006.

Rival Japanese automaker Toyota now sells five hybrids through its Toyota and Lexus brand in the United States, and will add a sixth, the $100,000-plus Lexus LS 600h L sedan this summer. Ford, Mercury, Saturn and Nissan now sell hybrid cars or sport-utility vehicles. The http://www.hybridcars.com Web site says Chevrolet, Dodge, GMC, Porsche and Hyundai will put others on sale between now and 2009.

Honda has said it will offer a new, smaller dedicated hybrid car -- about the size of the Fit, but not based on that model -- within two years. That's also when it will begin offering vehicles with diesel engines that it can sell in all 50 states, Marie said.

Despite the end of the Insight and Accord hybrids, Marie said, "We continue to see potential in the hybrid market."

Reach Matt Nauman of the San Jose Mercury News at mnauman@mercurynews.com or 408-920-5701.

Source: [url=http://origin1.contracostatimes.com/business/ci_6082354]Contra Costa Times[/url]
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