It started with the N360 Kei Car
The N360 was introduced in Japan in 1966 and went on sale in March 1967. It was a major success from the start.
The N360 was a so called Kei class car. Kei cars can enjoy benefits such as lower registration tax, road tax, and lower insurance costs as certain criteria are met such as restrictions on engine capacity, length, width and height. In rural areas owners of Kei cars do not have to prove they have adequate parking for their car. In Japan the N360 had to compete against other Kei Cars such as the Suzuki Fronte, the Mitsubishi Minica, the Subaru 360, the Mazda P360 Carol and the Daihatsu Fellow.
When Honda introduced the N360 with 31 SAE HP it started a „Kei-car horsepower war”. At that moment other Kei Cars offered engines producing only between 20 and 30 horsepower. Suzuki responded with the 32 Hp Fronte SS, Daihatsu with the 32 Hp Fellow SS and Mitsubishi introduced the Minica 70 with 38 Hp engine. Subaru introduced the Young SS sports model with 36 Hp in the last production year of its iconic 360 model.
And then came the N600!
In the years from 1955 until 1975 cylinder capacity of Kei cars was limited to 360cc. Honda wanted to export the N-series to overseas market, in particular to the United Sates. It was clear that the 360cc engine would have insufficient performance for export markets. Therefore Honda developed the N600E (E for export) out of the N360 and launched it in July 1968.