Oil prices are going up. As I sit here writing about Honda's new hybrid, the 2010 Insight, on the desk next to me is the front page of The New York Times declaring that major oil and gas projects now being delayed are setting the stage for "another surge in oil prices once the global economy recovers."
So a spike in the price of oil is really just a matter of time. For Honda right now, the price of oil is not so much an issue of time, but of timing.
That is, will pump prices go back up to the levels of last May/June that looked like they would make the launch of the gas-stingy 2010 Insight hybrid a smashing success?
In the early summer, with oil pushing $140 (U.S.) a barrel and apparently headed to $200 with a bullet — as predicted by Jeff Rubin at CIBC World Markets, among others — a clean emissions fuel sipper like the Insight looked like a slam-dunk winner.
Yet as the Times points out, "oil markets have had their sharpest-ever spikes and their steepest drops this year, all within a few months."
Indeed, by September, with oil prices sliding dramatically and pickup sales actually picking up, Honda nonetheless used the Paris motor show for the worldwide debut of a "concept" version of its new five-door gasoline-electric hatchback.
This hybrid, said Honda officials not quite willing to admit to past mistakes, would challenge rival Toyota's success with the Prius hybrid hatchback ($27,400). The new Honda would be far less expensive than the Prius — perhaps as low as $19,000 — and would thus set new standards in hybrid affordability.
By November, Honda was again teasing the public with more details about the Insight at the Los Angeles auto show. The company said its Insight would not only be cheaper than any other hybrid car on the market it would also become an almost instant best-seller.
The low price, said Honda types, would make it possible to sell 200,000 of the cars each year in Japan, Europe and North America. Toyota has yet to sell 200,000 Prius cars in a single year and it's the world's hybrid best seller.
Honda plans to introduce hybrid versions of other models, too. One is a sporty compact car, a 2+2 hatchback based on the CR-Z concept first shown a year ago at the Tokyo motor show.
The longer-term goal is to sell 500,000 hybrids a year world-wide by early next decade. Toyota, meanwhile, aims to reach annual sales of one million hybrids globally by the same time.
Thankfully, the Insight tease will be officially over by the second week of January. That's when Honda — one of the most secretive car companies in the world — will finally give us the straight goods on the Insight.
But why wait? After all, I am here in Phoenix to drive the Insight and get all the details first-hand. Unfortunately, in return for the chance to drive the car, I've agreed not to share what I've learned here in Arizona until Jan. 11. This is so that Honda can do a one-time global unveiling at the Detroit auto show.
But there is more than one way to tell a story. Using other sources, I've already pieced together almost all you need to know about the Insight.
The price will be in the $20,000-range. Not the mid-$20,000s and not the high-$20,000s, either. Take that, Prius. (For the record, Toyota will unveil a new version of the Prius in January at the Detroit show, though the likelihood of a major price drop is not great.)
Honda has reined in costs for the 2010 Insight by using Honda's existing Integrated Motor Assist hybrid powertrain, though in a smaller package and with lighter components.
