As the European brands chase the benefits of diesel in smaller cars--though they're sticking their toes in the hybrid/electric waters as well--the Japanese automakers continue to push forward with their established hybrid systems. The latest is Honda, which has revealed a new hybrid version of its Fit (Jazz) hatchback.

Honda is one of the few companies to focus its hybrid efforts on smaller cars. Most of its competitors are using the systems to boost fuel economy for mid-size and larger cars, leaving the smaller cars to conventional power for their efficiency. It's usually cheaper and more cost-effective to do so, but Honda thinks hybrid drive is the future of small cars, putting its cards on the table with cars like the new Fit Hybrid.

Set to make its world debut next month at the 2010 Paris Auto Show, the Fit Hybrid shares many of its components with the larger Insight, including its hybrid drive system. In this case, the drive system consists of a 87 horsepower 1.3-liter gasoline engine matched to an electric motor and sending drive to the front wheels via a CVT.

Honda Fit Hybrid

Honda Fit Hybrid

No performance figures have been released, but expect somewhere in the ballpark of 60-65 mpg for fuel economy and CO2 emissions of around 100g/km.

As for its appearance, the new Fit Hybrid looks largely unchanged from the standard model. Badging and exterior trim are the only cues used to distinguish the hybrid from a distance. Inside, there’s a single-color dashboard and blue-lit dials and instruments.

No word on any U.S. release date but concerns about price and benefit for the small-car segment could jeopardize things. The current standard Fit starts at just $14,900, and doesn't run far above $20,000 even when outfitted with every available feature. That doesn't leave much room to add the expected $1,500-$2,000 for the cost of the hybrid system, meaning Honda will be pressed to make the Fit Hybrid a good buy against similarly-sized and featured vehicles. First sales start in Japan and Europe early next year.