The HR-V is a small crossover, one size down from Honda's strong-selling CR-V. Like the CR-V, it is based on a platform developed for one of Honda's cars -- in this case, the recently launched all-new version of the subcompact Fit.
The HR-V is expected to arrive at U.S. Honda dealers sometime this winter. As of Tuesday, pricing hadn't been announced; expect Honda to be aggressive, as its new small SUV is joining a hot and increasingly crowded segment.
Building on Honda's success in a booming category
Subcompact SUVs were essentially unknown until a few years ago, at least in the U.S. But small crossovers have recently emerged as what TrueCar Executive Vice President Larry Dominique recently called a "no-compromise solution," and more and more buyers are choosing them over sedans.
As Dominique sees it, the latest compact crossovers have become almost ideal vehicles for many buyers. Unlike the big truck-based SUVs that were popular in the last decade, vehicles such as Honda's CR-V offer car-like handling and fuel economy, along with more appealing styling -- while still offering some of the space, practicality, and all-weather capability that made those big SUVs popular as family haulers back in the day.
Dominique noted that the CR-V actually outsold Honda's flagship Accord sedan last month. That's in line with a trend seen at other automakers: big sales gains for crossovers, while sales of sedans lag in comparison.
Now automakers are moving to fill in market gaps. With models like the CR-V -- and the rival Toyota (NYSE: TM) RAV-V and Ford (NYSE: F) Escape -- racking up big sales month after month, an increasing number of automakers are testing out the idea of even smaller crossovers.
Global models form the HR-V's American competition
Honda's new HR-V isn't just a U.S.-market experiment, though. It's a twin of the Vezel, which the company has offered in Japan and some other markets for nearly a year now.
Tiny SUVs might be new to the U.S., but they have long been popular in markets where consumers' budgets are tight and gas is expensive. Many automakers already have small crossovers in their global product portfolios, and more of those little SUVs are making their way to the U.S. market.
General Motors, for instance, has posted good sales numbers with its upscale Buick Encore crossover. It's a near-twin of GM's Opel Mokka, which has sold well in Europe. And it's about to get a sibling: The related Chevy Trax (again, a model that GM has been selling abroad for a few years now) will arrive in U.S. showrooms early in 2015.
Likewise, Nissan's small Juke crossover is a global model, originally designed in the U.K. and manufactured in Indonesia, the U.K., and Japan. Fiat Chrysler's new small Jeep Renegade is being made in Italy; while it will be sold in the U.S., the Renegade's real mission is to help establish the Jeep brand in China and other fast-growing foreign markets.
And while Ford hasn't yet entered this segment here in the U.S., it could: The automaker's EcoSport crossover, based on the Fiesta's architecture, is a strong seller in many foreign markets, including India. It also recently joined Ford's lineup in Europe.
(A few months ago, I asked Ford CEO Mark Fields whether the EcoSport was bound for America, and while he didn't quite come out and say yes -- and I didn't expect him to -- he very carefully didn't say no, either. Stay tuned.)
The upshot: The HR-V looks like another hit for Honda
We don't know too much about the HR-V yet, but we can safely guess it will share the Fit's 1.5-liter four-cylinder engine, will be made on the same assembly line in Honda's brand-new factory in Mexico, and its starting price will be less than the CR-V's $23,320, possibly under $20,000.
Beyond that, we'll have to wait for Honda's presentation in Los Angeles later this week. But two things seem clear right now: The HR-V will face some established competition, but Honda's track record with the CR-V, and recent U.S. market trends, suggest it should sell quite well.
John Rosevear owns shares of Apple, Ford, and General Motors. The Motley Fool recommends Apple, Ford, and General Motors. The Motley Fool owns shares of Apple and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.