By JUNICHI KAMIYAMA/ Staff Writer
July 4, 2021 at 07:00 JST
Honda Motor Co. said it will discontinue production of the Clarity, its only hydrogen fuel cell model, in August due to sluggish sales so it can concentrate on the development of fully electric vehicles.
Honda announced in April it will manufacture only fuel cell cars and EVs by 2040 in its shift from gas engine vehicles to bring its carbon footprint to zero.
Honda started selling its fuel cell model in 2016, two years after Toyota Motor Corp. released the Mirai fuel cell model.
Though Honda pitches its fuel cell model to rental car agencies in Japan and the United States, the market price in Japan carries a hefty 7.84 million yen ($71,100) price tag after tax.
Honda is struggling to deal with flagging sales as hydrogen stations have yet to be introduced in Japan on a wide scale. The company sold a paltry 240 units in 2020 both in and outside Japan.
Asked about the decision to halt production, a Honda representative said the automaker had “concluded it will take more time (for fuel cell cars to be accepted broadly) from the standpoint of mass-production technology and high costs.”
Honda will, however, continue working with General Motors Co. to develop fuel cell technology. But the Japanese automaker does not have any plans to release a successor to the Clarity as of now.
Honda said it will concentrate on electric cars for the time being. It currently only produces the e model and its initial limited sales target of 1,000 units had already ended since its release last autumn.
“Consumers do not have options,” said Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute Co. “Honda needs to show its taking positive steps (to rectify the situation) as soon as possible.”
Honda is also likely to bring an end to manufacturing of the Odyssey minivan and the Legend luxury sedan in Japan by year-end. The two models, as well as the Clarity, are assembled at the Sayama works plant in Saitama Prefecture, which will be closed for good at the end of March.
While sales of its motorbikes remain strong, Honda’s business performance in autos remains sluggish. For that reason, it is working to integrate production facilities and shrink its manufacturing capacity both in Japan and overseas.
The operating profit margin for Honda’s automobile section for the business year ending in March 2021 was 1.0 percent, far lower than Toyota’s 6.5 percent.
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