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Honda Plugs Into the Electric-Car Bandwagon

Honda Motor (HMC) plans to introduce all-electric and plug-in hybrid vehicles in 2012, the Japanese automaker said Tuesday. The offerings are part of a strategy to develop more fuel-efficient cars in an industry increasingly keen on being viewed as environmentally friendly.

In making the announcement, Honda President and CEO Takanobu Ito said the company had “no future” if it didn’t make vehicles that emitted less carbon dioxide. “The next 10 years will be true test for Honda’s survival,” he said.

The cars will be sold in Japan and the U.S., Honda said. In the U.S., the company already sells the Insight and CR-Z “mild hybrid” vehicles. But those designs, which stress performance over fuel economy, have been met with less-than-glowing reviews by the automotive press.

In making the move, Honda will join the ranks of other automakers such as General Motors, Nissan Motors (NSANY) and Toyota Motor (TM), which already have or will soon have plug-in electric vehicles available for sale. Nissan began selling its Leaf compact plug-in vehicle a few weeks ago, while GM’s Chevrolet Volt plug-in hybrid will arrive in showrooms later this year.

Technology Gap

Toyota has plans to bring a plug-in hybrid to market in 2011 and recently formed an alliance with start-up Tesla Motors (TSLA) to develop electric vehicles. Last week, the companies announced plans for all-electric version of Toyota’s popular RAV4 small SUV, a prototype of which Tesla plans to deliver to Toyota later this year.

“Considering Toyota is set to launch a plug-in hybrid next year, Honda’s 2012 schedule sounds a bit far off. This underscores the gap in the level of technology at these automakers,” Kazutaka Oshima, president of Rakuten Investment Management, told Reuters.

While Honda, Japan’s No. 2 automaker, is a close second to Toyota in electric-vehicle technology, “there really isn’t anyone else who is as advanced as Toyota in this field,” Oshima told the news agency.

Honda could use the jolt that new products can provide in bringing consumers into showrooms. Its shares are down more than 11% this year in trading on Wall Street. And while the company’s sales so far this year have been helped in part by Toyota’s massive recall woes, the weak recovery could send potential customers looking elsewhere for the latest in auto technology.

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