Honda’s UK unit will counter rival firms’ low CO2 specials in the C-segment by introducing a low-cost, high-spec, fleet-only Civic this week.

With Civic sales in the corporate market down 37% in the first five months of 2010, Honda has devised a way of offering a low-tax version of its hatchback without cutting the car’s CO2 output.

The two factors governing company car tax in the UK are CO2 output and the car’s list price. According to the automaker, one of the biggest areas of migration within the C-segment has been to low tax cars.

“The question is, ‘how do we make the Civic more compelling to the corporate customer?’. We need to make it as tax efficient as possible,” said Honda’s head of corporate sales Graham Avent . “As a fleet person it’s not possible to alter the CO2 output, so we have to reduce the P11D [taxable list price].”

The new trim level that will achieve this in the Civic range will be known as Ci. It is almost identical in specification to the current Civic Si model but is fitted with Bluetooth as standard but is priced over GBP3,000 lower. The Ci will be unbadged, however, it will show as a Ci on the vehicle registration document.

“We’ve put in the money up-front so we can’t put volume bonuses on this at the dealer,” added Avent.

Honda will limit the cars to fleet customers by only making it available to VAT registered firms [ie those that can reclaim the sales tax -ed].

“This offer is for fleet customers only and will rival the Golf Bluemotion and BMW 116d,” said Avent.

“The Civic Ci is not on the automaker’s consumer website and the cars won’t be in showrooms, but information will be available in dealers and for fleet customers.”

Honda expects the Civic Ci to account for 8% of the model’s total sales. It will be available to order from 1 July and arrive in showrooms on 1 September.

Under the conditions of the low-price, low-tax Ci model, buyers will not only have to be VAT registered, but also agree not to sell the car for at least 12 months after purchase.

Honda’s fleet sales are down more than a quarter year to date, however, Avent expects 2010 to end at a similar level to 2009 at 26,000 cars. He also said this figure was unlikely to change in 2011, but would be back at 2007 levels of 36,000 cars by 2014.