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Honda's Fit: Can It Crush Chrysler?

Tuesday, 26 Aug 2008 | 3:54 PM ET
2007 Honda Fit
AP
2007 Honda Fit

They say timing is everything.

For Honda Motor, nothing could be truer. In the next couple of weeks an updated version of the company's red-hot subcompact, The Fit, will start rolling into showrooms. Talk about having the right model in place at the right time.

By moving up the Fit's roll-out, Honda should capitalize on the public's on-going demand for fuel efficient cars. In the first half of this year fit sales have soared more than 67 percent. By year's end, Honda is on pace to sell more than 80,000 of the pint-sized cars.

The new Fit comes at just the right time for Honda, which is benefitting from a line-up leaning towards cars and crossovers. Not only that, those models have a reputation for being fuel-efficient and reliable.

All those factors explain why Honda's sales held up better than any of the other automakers in the first half of this year, when soaring gas prices killed demand for new models. In fact, of the top six automakers, Honda is the only one to increase U.S. sales in the first six months of '08, according to the research firm Autodata.

How far can Honda ride this wave? It's not impossible to see the company come close by the end of the year to passing up Chrysler for No. 4 in U.S. sales: Honda's market share is now almost 11 percent. And in addition to the Fit, the Accord and Civic are bringing in buyers.

The next challenge for Honda will be cracking Toyota Motor's dominance in hybrids. The automaker's next generation of green cars need to connect with buyers, unlike the company's current line-up, which is nice -- but not a threat to Toyota.

Honda's not perfect, but certainly on it's game right now. As they say, it's good to be in the right place at the right time with the right product.

________________________________
...And the others:

- Ford Motor

- General Motors

- Nissan

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Where's Oil Tuesday?

- Oil Climbs to $116 on Hurricane Gustav Worries

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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