Reports also suggest Honda will be ending production of the Insight in Japan, with European dealers told to sell off their remaining stocks of the petrol-electric hybrid.
The first Insight was launched in 1999, becoming the first hybrid vehicle to go on sale in Europe. Its success was short-lived however, with the more successful Toyota Prius launched in September 2000.
According to industry journal Automotive News Europe, Honda had sold 280,629 units of the Insight globally by the end of 2013, with over 157,000 of those being sold in Japan. Figures from analysts Jato Dynamics show European sales of the Insight fell by 62 per cent in 2013.
While its short-term focus will now shift to its diesel range, Honda could expand its hybrid offering again as soon as 2015 when the new Jazz goes on sale. Badged as the Fit outside the UK, the new car will be offered with a 1.0-litre three-cylinder turbocharged engine in standard form, but is also likely to be available as a hybrid.
The hybrid Jazz is tipped to use a 1.5-litre engine mated to an electric motor, generating a combined 133bhp.