Hybrid-car superstar Toyota has some competition on the horizon from rival manufacturer Honda. Not long after ditching their Accord Hybrid, rumours began to swirl about a new Honda hybrid vehicle that would be introduced in early 2009.

More details were announced recently, and Honda says that they’ve carried out significant cost reductions on the Integrated Motor Assist (IMA) system, which will result in the most affordable hybrid vehicle to date.

The vehicle will be offered in a five-door hatchback with five seats, and will carry styling cues reminiscent of the FCX Clarity fuel cell vehicle. It will be built at Honda’s Suzuka factory in Japan, though a name and specific details about the machine are yet to be announced.

"Honda has been at the forefront of hybrid development since it first introduced the American public to hybrid technology with the Insight in 1999," said John Mendel, executive vice-president of American Honda.

"These new advancements in Honda’s technology and production systems will result in cost reductions that will allow us to make hybrid technology available to a whole new generation of buyers."

The new hybrid vehicle’s launch will be followed by a small hybrid car based on the CR-Z concept, as well as a Fit Hybrid model. They will join the Civic Hybrid.