Honda Sets up Hybrid Battery Venture Despite Slump

Dec. 17, 2008
Honda believes accelerating the development of advanced environmental technology is necessary in severe business conditions.

Honda Motor Co. on Dec. 17 announced a venture to develop lithium-ion batteries, saying environmentally friendly hybrid cars were heading for the mass market despite the global auto industry slump. The joint venture is with Kyoto-based battery maker GS Yuasa Corp. and will cost $170 million. Honda will take a 49% stake in the company which will be based in Kyoto.

"Hybrid vehicles are expected to move into the mass-market stage as an effective environmentally responsible technology," the companies said. "GS Yuasa and Honda determined that development of smaller and lighter lithium-ion batteries could be achieved by combining the technological strengths and know-how of the two companies," they said.

The announcement came immediately after the automaker slashed its profit forecast by more than half for this year, its third cut as the global economic crisis takes a heavier toll on the auto industry. Honda also said it will curb production at home and abroad as well as radically revising its capital spending plans.

But Honda president Takeo Fukui said the company believes accelerating the development of advanced environmental technology would be especially necessary in the severe business conditions. "The development of lithium-ion batteries is significant for hybrid cars to become common in the future," he told a news conference.

Honda plans to unveil next year its Insight car, which it hopes will lead the way to a mass market for hybrids.

Copyright Agence France-Presse, 2008

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