Honda working on new-concept car for North America

DETROIT, Jan 8 (Reuters) Honda Motor Co. is working on developing a new-concept vehicle for the North American market for launch around 2010, the Japanese auto maker's regional chief said.

''To make sure we continue growing, we need to strengthen sales within our existing product line-up. But we're also working on launching a new-concept-type vehicle by around 2010,'' Koichi Kondo, chief executive officer of Honda North America and American Honda Motor, told reporters at the North American International Auto Show.

Kondo declined to provide details, but said the product would not belong to the pickup truck segment or the segment below the Fit subcompact model.

''We're working hard right now to come up with the best type of vehicle,'' he said, adding the product should not cannibalize sales of its existing models.

The new car, Kondo said, would hope to repeat the success of its CR-V crossover, which was a unique, car-based sport utility vehicle at the time of its inception. Crossovers now make up more than half of SUV sales in the United States.

Honda is also developing a new hybrid-only ''family car'' targeted for launch in 2009, with annual sales targeted at 100,000 units in North America. Honda has said it wants to sell a total 2 million vehicles in North America by 2010.

Kondo said Honda was also aiming to beef up its Acura premium brand, which has lagged rival Toyota Motor Corp.'s Lexus by miles despite an earlier launch.

''A new sports car could probably raise Acura's image,'' Kondo said. ''I'm aware that some people have been calling for a V8 model.

We haven't made any decisions, but I guess one day we're going to need one.'' Acura unveiled an ''advance sports car concept'' model at the Detroit show on Sunday that will succeed the NSX sports car. It will be powered by a huge V10 engine.

Kondo said Acura would aim to join Mercedes, BMW and Lexus as tier-one premium brands over the next five to 10 years.

Honda has targeted U.S. sales of 1.56 million units this year, up 3.3 percent from 2006 when it boosted its market share to 9.1 percent.

A shortage of parts for four-cylinder engines significantly reined in Honda's car sales last year as consumers migrated from less fuel-efficient V6 engines.

But Kondo said the bottleneck was more or less gone, and should ease further as Honda reshuffles production and adds more engine and car capacity in 2008.

Honda's sales are expected to get a further boost in 2008 from the remodelling of the popular Accord model this fall.

But Kondo predicted the overall U.S. market to shrink from last year's 16.8 million units to between 16 million and 16.5 million units this year as the industry tries to keep a cap on sales incentives.

''We're expecting incentives both for the overall industry and at Honda to level out this year,'' he said, noting that Honda's average incentives had risen for the past four years. ''That may cause a pullback in demand this year,'' he added.

REUTERS DKS PM0426