Honda Motor Co's new chief executive said on Monday that Japan's No.2 automaker would speed up the rollout of its hybrid cars as he aims to steer a nimble company that reacts more quickly to changing customer needs.

In his first public appearance after taking office last month, Takanobu Ito said Honda would launch the planned CR-Z hybrid sports car next February and a gasoline-electric Fit subcompact by the end of 2010, citing the growing importance buyers place on fuel economy and environmental considerations.

I think everyone is going to go the way of hybrids, the 55-year-old former engineer told a media gathering at Honda's headquarters in Tokyo.

Bringing hybrids quickly to customers will be a major focus of our activities, he said.

I want Honda to be a speedy company.

That would include accelerating the development of a new type of hybrid system with two electric motors to be mounted on medium- to large-sized vehicles, he said, after Honda shelved its plan to use clean diesel engines to improve mileage on bigger models.

Ito declined to say when the new hybrid system would be ready.

Virtually all engineers that had been part of Honda's Formula One team are now working on hybrid development, he said. Honda pulled out of the race in December to avoid falling into the red.

Honda in February introduced the Insight hybrid, the first of a family of low-cost gasoline-electric cars that Ito's predecessor, Takeo Fukui, predicted would help hybrids account for one-tenth of car sales in the early part of next decade.

Sales of the Insight have outpaced Honda's monthly target of 5,000 units in Japan since its launch. To meet demand, Honda said it started building the model on a second line at its Suzuka factory in mid-June, taking daily production up slightly from the previous 700 units.

Shares of Honda ended up 0.6 percent at 2,370 yen, while those of other automakers fell sharply due to concerns about a stronger yen. The benchmark Nikkei average lost 2.6 percent.


Sales of the Insight in the United States, however, have so far fallen short of Honda's targeted annual pace of 90,000 units -- or just under half of its global sales goal of 200,000 units.

Ito attributed that to limitations in production capacity for the Insight, as well as a deliberate priority being placed on filling orders in Japan, where the company can make more profit due to the yen's strength against the dollar.

Honda's Insight also faces stiff competition from Toyota Motor Corp's Prius, which is more spacious, fuel-efficient and costs just $2,000 more.

Ito said that while he hoped the U.S. market would improve next year, the severity of economic conditions probably meant a recovery could be at least two years away.

When you look at the state of the (U.S.) economy, it's difficult to imagine that it would recover in the next two years, he said.

Ito said conditions in Europe were even more opaque, and that emerging markets such as China and India held the biggest promise for growth.

Honda is the only top-three Japanese automaker to have escaped a loss last year, and has forecast a 95 percent drop in operating profit to 10 billion yen ($108 million) for the financial year to March 2010.