Japanese car manufacturer Honda has announced that it is to begin building a new hybrid powertrain vehicle at its plant in Japan.

The new vehicles will go into production in 2009 in Suzuka and will play a key role in increasing Honda's fleet fuel economy average.

The company is aiming to raise its average fuel efficiency by five per cent by the end of the decade.

Its plant will have the ability to produce 200,000 of the cars each year, with half of the cars produced said to be heading for the US market.

Pricing for the new hybrid will be much lower than that for Honda's current offering, the Civic Hybrid, which has a starting price of $22,700 in the US.

According to Automotive News, Honda officials have said that the new car will be branded under the Honda badge, rather than under the company's luxury car badge, Acura.

Ÿ Adfero Ltd