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Honda shifting hybrid focus away from mainstream

2016 Honda Civic RS

Honda, the brand that pioneered hybrid passenger cars in Australia, is backing away from the technology because the sales numbers no longer add up locally.

Having launched the Insight hybrid here in 2001, Honda plans to pull its hybrid Accord from the local market later this year because of sluggish sales.

Company boss Stephen Collins says that without government subsidies, hybrids won't become mainstream sellers in Australia.

The company's hero car, the NSX, will be a hybrid but the technology won't be on the new Civic, which will go on sale in sedan form from June.

"The hybrid market is less than 1 per cent of the total market and I think if you backed (Toyota's) Camry (hybrid) out of that it would be a lot, lot less," he says.

"Hybrid still has a place in our brand but it's not core business and that's why it's not going to be in Civic."

Incentives are essential to kickstarting hybrid sales in Australia.

This contrasts sharply with Japan, where hybrids make up roughly 65 per cent of the company's sales "because the Government gives incentives for hybrid sales".

He says incentives are essential to kickstarting hybrid sales in Australia. "I think it would clearly make a difference, particularly in smaller, lighter, lower-end cars."

Collins says the local operation is focusing on volume-selling vehicles as it looks to rebuild the brand after several years of decline after the global financial crisis in 2008.

This ultimately could spell doom for one of its best known nameplates, the Accord.

Overall Honda sales rebounded in 2015, up more than 20 per cent on the arrival of the HR-V baby SUV. However, Accord sales dived.

In the past decade, Accord sales have plummeted from 17,500 annually to less than 1000 last year. Collins says the car's future is less than certain, although there will be a midlife update in coming months.

"That segment is particularly tough and it seems the trend is not dissimilar to the large car trend … the volume is pretty small," Collins says.

The Civic is crucial to maintaining the momentum and attracting younger buyers.

"Our desire is absolutely to keep it … (it depends on) what happens in that segment. I think it's important to have that flagship sedan but it's a tough segment and it's not growing, that's for sure."

The brand's focus this year will be introducing the next Civic. The sedan coming in June will have a 1.5-litre turbo option. A hatch will follow in the first half of next year and the flagship Type-R hot hatch will come at the end of 2017.

Collins says the brand will be relying on a sportier Civic range to "get its mojo back". This has begun with the success of the HR-V but the Civic is crucial to maintaining the momentum and attracting younger buyers.

"This is the next stage in our rebuilding," he says.

He admits the brand lost its way after the GFC, when it cut corners and tried to charge a premium for its cars that wasn't justifiable. "We've clearly turned that around. Our brand has great awareness, we need to get on the shopping list."

Is Honda heading in the right direction? Tell us what you think in the comments below.