Honda Insight Sees Storm Clouds in the US

After they began the year expecting milk and honey to run alongside hundreds of thousands of Insights on American streets, the Japanese over at Honda now face some troubled times ahead. Based on the economic conditions, as well as on the fierce fight put up by rival Prius, Honda's American division has revised its sales expectations, bringing it down by a third.

"I don't think we'll get to 90,000," John Mendel, the company's US executive vice president told Bloomberg. As a result, the manufacturer revised that number down to only 50,000 to 60,000 units.

To blame for this is also petrol prices in the US. Despite the fact that they are now increasing, petrol prices are still some 35 percent lower than last year, making petrol powered vehicles more appealing to consumers. Last hopes for Honda are to be found in Japan, where the manufacturer is on top, mostly thanks to the petrol price, which is twice as high as the one in the US.

"Sales of hybrids have a strong correlation to gasoline prices, especially in the US and Toyota's Prius has had more customers in the past, so it's a tough competition for Honda," Koji Endo, Credit Suisse Securities analyst told the source.

Hybrids are now feeling the heat in the US, as sales of this type of vehicles fell by 38 percent to the end of May. This doesn't stop Toyota though hoping it will still sell 180,000 units of the Prius in its first year. Compare this with the expectations Honda has for the Insight...

The battle between the two Japanese hybrids is only beginning, so expect the above mentioned sales figures to change by the month.