Honda Plans Low-Emission Diesel to Compete in Fuel Efficiency
By Kae Inoue and Alan Ohnsman
Sept. 25 (Bloomberg) -- Honda Motor Co., Japan's third- largest
carmaker, will introduce a diesel car that meets California's emission
standards and a fuel cell-powered sports car within three years as it
vies with Toyota Motor Corp. for buyers of fuel-efficient autos.
A 2009 model four-cylinder Honda will be first to meet U.S.
Environmental Protection Agency and stricter California diesel exhaust
rules, President Takeo Fukui told reporters Friday in Tochigi, Japan.
The car has 30 percent better fuel economy than an equivalent gasoline
model, he said.
Honda is the world's largest engine maker and trails only Toyota in
hybrid-electric auto production. Near-record U.S. gasoline prices this
year lifted demand for fuel-efficient autos, helping Honda's sales rise
5.3 percent through August in its biggest market.
``There will be a big shift to diesels one day as gas prices will
probably continue to rise,'' said Norihito Kanai, a senior research
analyst at Meiji Dresdner Asset Management Co. which manages $2.5
billion in equities in Tokyo.
Diesels accounted for 3.6 percent of the 11.4 million light vehicles
sold in the U.S. this year through August, according to market
forecaster J.D. Power & Associates. Power estimates diesels will
account for 9 percent of U.S. auto sales by 2010.
Gasoline cost almost $3 a gallon through August, according to the U.S.
Energy Department. The price dropped to $2.44 a gallon as of Sept. 22
from $2.91 a month earlier, according to AAA's Daily Fuel Gauge Report
Diesel fuel offers fuel-economy comparable to hybrids. It's also
dirtier than gasoline, creating harmful levels of soot and nitrous
oxide fumes when burned. Strict air-quality rules prevent Volkswagen AG
and DaimlerChrysler AG, the biggest diesel sellers, from offering such
models in California, New York and other U.S. states.
``Mercedes hasn't been able to get its diesel certified in
California,'' said Phil Gott, an engine technology analyst for Global
Insight Inc. in Lexington, Massachusetts. ``If Honda is ready to go in
two to three years, that's a feather in their cap, and potentially
significant for U.S. acceptance of diesel.''
California sued Honda and the other five largest carmakers in the U.S.
last week for creating a ``public nuisance'' by making millions of
vehicles that emit huge quantities of carbon dioxide, a greenhouse gas
that increases the temperature of the earth's atmosphere, according to
the complaint. The suit is seeking compensation for pollution and
erosion caused by increased greenhouse gas levels.
To meet U.S. pollution rules for diesel autos, Volkswagen and
DaimlerChrysler plan to use a system that squirts ammonia on diesel
fumes as they pass through a filtering chamber. The U.S. EPA and
California regulators haven't yet approved that system.
Honda said its diesel engine differs from rivals' by using a new
nitrogen oxide catalytic converter to generate and store ammonia
on-board, rather than adding it separately as the Volkswagen and
DaimlerChrysler systems require.
``We hope to take the leadership in environmental technology as we did
with CVCC,'' said Fukui. That early version of the Civic compact in
1973 was the first car to meet U.S. low- emission vehicle rules without
a catalytic converter.
``It's the company's responsibility to minimize the impact of
emissions,'' Fukui said.
Honda, which had five years of consecutive record earnings, is spending
record 545 billion yen ($4.7 billion) in research and development this
business year, depressing its profit outlook for the year ending in
Particulate matter or soot produced by diesel engines contributes to
lung disease, aggravates asthma and other breathing problems and
creates smog, according to the EPA.
New U.S. regulations starting in 2007 require vehicles that weigh less
than 6,000 pounds to emit no more than 0.07 grams of nitrogen oxide per
mile on average, Honda said.
Honda shares fell 40 yen, or 1 percent, to 3,830 yen in Tokyo Stock
Exchange on Friday.
Fuel-Cell Sports Car
Honda on Friday also unveiled a drivable version of the FCX fuel-cell
sports car first shown at the Tokyo Motor Show in 2005. Limited sales
of the low-slung model begin in Japan and in the U.S. within two years,
``Fuel-cell vehicles will be the ultimate green vehicle,'' said Fukui.
``There's no doubt about that.''
The new version replaces a boxy hatchback model Honda has leased to a
U.S. family and government agencies in the U.S. and Japan. It weighs
180 kilograms (396 pounds) less than the current FCX.
Fuel cells, typically layers of plastic, carbon fiber and precious
metals such as platinum, create electricity in a chemical process that
combines hydrogen and oxygen. Ideally, the only byproduct is water
Costs for the cars exceed $1 million, Honda and other automakers have
said. Range and durability constraints and few hydrogen stations have
limited fuel-cell vehicles to small test fleets in the U.S., Japan and
To contact the reporter on this story: Kae Inoue in Tokyo