Rumours are that Honda is developing a hybrid version of it’s Honda Fit (Honda Jazz on our shores) for worldwide release as early as Q2 2008. It is intended to be the first budget hybrid, priced at less than USD$ 12,000. The cheapest hybrid around so far costs US$ 16,840. This rumour was reported by Nihon Keizai, one of the big financial dailies in Japan.

Honda spokespeople neither confirmed nor denied this rumour, but remarked that Honda had the technological ability to mount it’s Integrated Motor Assist (IMA) hybrid system onto most of it’s vehicles, including the Honda Fit. The report by Nihon Keizai says Honda is developing a new 1.0 litre engine to twin with an electric motor for the Honda Fit’s Integrated Motor Assist system.