Trying to take on the Toyota Prius, Honda has unveiled a hybrid version of its popular Fit car – known as the Honda Jazz in Europe.
The car will be the cheapest petrol-electric car in Japan selling for the equivalent of just under fourteen thousand euros.
Honda’s other hybrid offering – the Insight – has failed to dent Toyota’s dominance.
The Hybrid version of the Jazz is expected to go on sale in Europe next year.
It is also considering selling the car in the United States at some time in the future.
Competition in the hybrid segment is set to heat up as industry leader Toyota expands its line-up to meet growing demand for fuel-efficient cars.
Toyota said last month it would produce a small hybrid model at its factory in France from 2012.