Honda Motor Co. said Jan. 290 it was studying the possibility of marketing a new compact car in the United States but denied a newspaper report that it had already decided on such a move, according to a Reuters report.
The Nihon Keizai
business daily said Japan's second-largest automaker would start selling a new 1,300cc compact car in the United States, its most important market, to counter the growing popularity of cheap South Korean-made vehicles.
The new model would be based on Honda's strong-selling Fit subcompact, also known as the Jazz, it said, according to Reuters.
It will be priced from around $10,000, cheaper than the Civic -- the most popular small car in the United States for Honda, the paper said.
"It's pure speculation," a Honda spokesman said, according to Reuters. "We've said that we're studying a model that's below the Civic class, but nothing has been decided."
The business daily said Honda was considering exporting the vehicles from Japan but may make them in Brazil if the dollar continues to trade below 110 yen, according to Reuters.
The news agency noted that Japanese auto executives have expressed concern that the popularity of South Korean vehicles among young, first-time buyers could eventually undermine their stronghold in the U.S. small-car segment.
Reuters said Honda is especially vulnerable because, unlike many rivals, it has no platform on which to build conventional pickups, a significant portion of the U.S. market.