Honda Motor Co.
) announced the launch of the most fuel-efficient vehicle Honda Fit
in the United States. The small, four door hatchback Honda
Fit delivers 118 miles per gallon (mpg), which is more efficient
Ford Motor Co.
) Focus with 105 mpg,
Nissan Motor Co.
) Leaf with 99 mpg and Mitsubishi i-MiEV. The vehicle will be
introduced in the markets of Oregon and California this summer.
The Honda Fit requires 28.6 kilowatt hours of electricity to
travel 100 miles, costing about $3.30. On the other hand, the gas
powered Fit version will require 3.2 gallons to travel 100 miles,
leading to an expenditure of $11.52. An average driver traveling
13,500 miles per year will spend $445 on electric Fit or $1,552 on
gasoline regular Fit.
The electric Fit is priced at $29,125 including a $7,500 federal
tax credit. The gasoline version of the Fit is priced at about
$12,210 less than the electric Fit. High price puts pressure on the
demand for Honda electric Fit.
The company plans to lease out electric Fits this summer for
$389 per month. The Fit EV will travel 82 miles after a full
recharge for three hours with 240 Volt charging outlets.
Fit EV will be more advantageous in Oregon as gasoline is priced
18% higher than the national average while electricity is 16%
lower. Therefore, electric Fit would save $121 per month of fuel
Honda believes that customers will prefer Fit EV by not
considering the cost perspective but keeping environmental issues
in mind along with less dependency on fuel imports.
Honda Motor Company is a leading manufacturer of automobiles and
the largest manufacturer of motorcycles in the world. It is the
second largest automaker in Japan, next to
Honda Motor currently retains a Zacks #1 Rank, which translates
into a short-term (1 to 3 months) Strong Buy rating. The automaker
expects a revival in sales and profits in fiscal 2013, based on
higher revenues, favorable model mix and effective cost reduction
measures. The company expects to benefit from stricter environment
regulations given its long-term focus on hybrid vehicles.
However, appreciation of Japanese Yen against most of the
foreign currencies will put pressure on the company. We currently
have a long-term (more than 6 months) Outperform recommendation on
FORD MOTOR CO (F): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
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TOYOTA MOTOR CP (TM): Free Stock Analysis
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