Honda Motor will start selling a lower-priced car targeting young people in North American starting in 2006, a market that the Japanese automaker sees as key to continued growth, chief executive Takeo Fukui said, according to the Associated Press (AP).

The “entry-level car” will be priced lower than the Civic compact, which starts at about $US13,000 (£7,025), to respond to growing demand for cheaper models, Fukui told AP at Honda’s Tokyo headquarters, though he declined to give details.

“The North American market remains crucial for Honda,” Fukui reportedly said.

Current Honda Fit hatchback is sold in export markerts as the Jazz

According to AP, he said Honda will also introduce other models in the United States, including a remodelled Odyssey minivan this autumn and the Honda SUT sport-utility pickup in spring 2005.

Honda will also strengthen its offerings with improved fuel economy as it expects the need for fuel-efficient models to grow with the recent surge in petrol prices in North America. Such models include the Accord hybrid planned for this autumn, the company said, according to Associated Press.

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Just-auto believes the new ‘youth’ Honda model for the US could be the successor (or a derivative) to the current Fit subcompact, sold as the Jazz in most export markets. It has been a big hit, especially here in the UK, where it has been highly rated for its build quality, reliability and versatile interior by motoring writers since launch in 2002.

The current model line will be about five years old in 2006 – and due for replacement as Honda operates on a four or five-year replacement cycle for most model lines.

Most Jazz/Fit models sold around the world are five-door hatchbacks but a four-door sedan derivative called the City is built in Thailand for sale in Asia Pacific markets (including Japan) as the Fit Aria. The sedan is also assembled in China as the Fit, according to AutoIndex – over 16,000 were built there last year.

Chinese assembly of the sedan version makes the Fit/Jazz model line a strong contender for the US for a second reason: Honda Motor’s Chinese local assembly joint venture partner, Guangzhou-Honda Automobile Co. Ltd, is currently building an export-only factory due to start assembling cars in 2005 – this could be an ideal source for the new American model range.

Sedan derivative assembled in Thailand and China is known variously as the City (Thailand), Fit Aria (Japan) and Fit (China)

Alternatively, Honda may follow the approach Toyota took when creating the US-only youth-oriented Scion line and simply‘Americanise’ one or more of its line of currently Japan-only subcompact models.

Honda currently sells four box-shaped models called ‘Life’, ‘Mobilo’, ‘Mobilo Spike’ and ‘That’s’ in Japan. Any of these could easily be re-engineered for the US and turned into an ideal rival  for Scion’s similar sized, box-shaped xB.

The xA and xB subcompacts that launched the Scion brand in North America were, in fact, both spun-off from Japanese domestic market models; the xA was based on the Toyota Ist and the xB was derived from the bB.

The recently launched xC coupe, a rival for Honda’s Civic coupe, was, however, designed specifically for Scion.

Graeme Roberts