American Honda Motor Co. Inc. started production Thursday on the third generation 2016 Honda Pilot at its Lincoln, Alabama, plant. The three-row SUV goes on sale next month.

The up to eight-passenger SUV offers more family-friendly technology, is more premium looking than the outgoing Pilot and shares exterior looks more like its CR-V and HR-V siblings. The SUV gains 3 1/2 inches in length and has more cargo and passenger space than the previous Pilot. Pilot also has improved fuel economy by as much as two miles per gallon combined, which Honda says makes it the most fuel-efficient midsize SUV offering.

"We couldn't be more excited or confident in the capabilities of this new vehicle," John Mendel, executive vice president of American Honda Motor Co. Inc., said in a call with reporters Wednesday. "It's going to set a new bar for so many different levels in safety, fuel efficiency, family friendliness and comfort in this segment."

The new Pilot hits dealerships on June 18. Pricing begins at $30,875 including destination for an LX model with two-wheel drive. An all-wheel drive Pilot LX starts at $32,675 including destination. The new top-of-the-line Pilot Elite trim with all-wheel drive, navigation and rear entertainment system begins at $47,300 including destination fee.

Mendel said annual sales for the new Pilot could reach 120,000 or higher. He said production of the Pilot will hit 120,000-plus a year when the plant is ramped up to full capacity. He said he expects production will go beyond that figure "based on demand from the consumer."

"Our capacity is sold to dealers already," Mendel said.

Honda has sold 48,103 Pilot SUVs through April this year, up 56.2 percent. Last year, Honda sold 108,857 Pilots, down 14.1 percent.

The vehicle is about 300 pounds lighter than the previous version. It also features a new 3.5-liter V-6 engine that deactivates three cylinders when not needed to save fuel. The Pilot also offers stop-start technology to shut off the engine at stops and reactivates it when a driver lifts his or her foot from the brake. The Pilot also has a new six-speed automatic transmission and a new nine-speed transmission is available for upper trims.

The Pilot mostly is sold to families who are loyal customers. Honda says 63 percent of Pilot buyers buy another Honda vehicle.

Mendel said sales and initial response for the small HR-V, which went on sale earlier this month, has been "phenomenal" without any advertising.

The first Pilot was introduced in 2002 as a 2003 model and a second-generation launched in 2008. The Pilot competes with SUVs such as the Ford Explorer, Nissan Pathfinder and Chevrolet Traverse.

Honda has announced investments totaling more than a half a billion dollars at the plant over the past three years. The 3.7 million-square-foot Alabama plant also builds the Honda Odyssey minivan, Acura MDX, V-6 engines and it also will produce a new Honda Ridgeline pickup starting early next year. Last year, Honda built 363,419 vehicles at the plant. It employs more than 4,000 people.

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