Honda Motor Co has reportedly abandoned plans to build a new micro-car factory and develop a clean diesel engine in favour of focusing more heavily on hybrids and other green vehicles, according to Japan’s Nikkei Business Daily.
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The report said Honda was planning to develop a new hybrid system to improve the efficiency of its larger vehicles, with production at the Yorii factory likely to begin in 2013.

Construction of the Yorii plant has already been completed at a cost of 113 billion yen ($1.5 billion) with an annual capacity of 200,000 vehicles.

Honda CEO, Takanobu Ito, is known to be determined to step up Honda’s production of hybrid vehicles and will announce the company’s medium-term strategy at a press conference early next week.

The report also suggested that Honda had plans to restructure its product line by dropping the Legend and Elysion models and placing a greater emphasis on low-priced cars for emerging markets like India.

The all-new Civic – due to be released in the first half of 2011 – would also be sold purely as a hybrid vehicle in Japan according to Nikkei.