Honda increases stake in kei car manufacturer

life.jpgHonda has increased its stake in Yachiyo Industry — the manufacturer of its Life and Zest kei cars — to 51.14%. Previously, they held a 34.5% share. Higher fuel prices have resulted in a greatly increased demand for mincars, which receive special tax considerations from the government and combine fuel-efficiency, excellent use of space, and fairly surprising levels of equipment in remarkably compact packages at competitive prices.

This year has seen the introduction of a passel of new and/or redesigned kei cars in Japan from just about every marque, each exceeding initial sales projections almost without fail. The additional investment in Yachiyo by Honda is a very strong indicator that the auto giant doesn’t see demand slowing down anytime soon.

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Kei cars are restricted to 660cc engines, which produce around 52 horsepower in normally-aspirated form and 64 horses (the maximum allowable in this class) in turbo guise. They are generally offered with a choice of 2WD or 4WD drivetrains as well. [Mayuko Ota, Marketwatch]