Honda Rethinks Diesel Idea for North America

Diesel-gas price gap makes Honda rethink diesels for U.S.

Honda Motor is reconsidering its decision to launch diesel-power vehicles next year in the U.S., where diesel fuel has become much more expensive than gasoline.

"Right now we are re-evaluating, due to trends in gasoline and diesel prices, and the price of raw materials we use in the exhaust clean-up system," according to Honda spokesman David Iida.

Honda's move appears to be solo. But Honda's considered a savvy player in the U.S. market, so others might be tempted to rethink U.S. diesels.

Honda has been promising a four-cylinder diesel next year in a sedan from its Acura luxury brand. After that, it said it would sell larger models, probably SUVs and vans, with V-6 diesels.

Diesel cars typically retail for at least $1,500 more than similar gasoline models, but they get 20% to 40% better mileage.

The average price of diesel fuel, though, is running 40% to 50% more than average gasoline prices, according to data from the Oil Price Information Service. That wipes out cost savings from the diesel's improved mileage.

Iida says Honda will decide "sooner rather than later" on going ahead with U.S. diesels, but wouldn't pin down a date.

Rival Nissan says it still plans to sell a V-6 diesel in the premium Maxima sedan in the U.S. in 2010. But spokesman Scott Vazin says the price premium for diesel fuel is worrisome. "It's why we're putting it on our flagship. We don't know where (fuel prices) will be when we launch, but we expect some pent-up demand. And our perception of the diesel buyer is someone who keeps the car longer," minimizing the drawback of its higher price.

Volkswagen, Jeep, Mercedes-Benz and BMW are selling U.S. diesels. Audi plans a diesel SUV in April. The VW Jetta TDI diesel, about $23,000, is the lowest-priced diesel in the U.S.

Worldwide demand is greater for diesel than for gasoline, keeping the price up even as gasoline has tumbled to less than half its $4.11 peak in July, notes Fred Rozell, price expert at OPIS.

The gap between gasoline and diesel "is higher than it has ever been, and typically those relationships eventually fall back to the norm," Rozell says. "I think the economic slump globally will bring diesel down."

Source;
http://www.usatoday.com/money/autos/2008-12-07-honda-diesel_N.htm

Another Honda Diesel Article; Honda Delays 60-mpg Diesel Acura TSX

The European diesel-powered Acura TSX gets more than 60 miles to the gallon in EU driving tests. But Honda is delaying production for the U.S. due to cost issues and technical obstacles.

Honda announced last week that it will delay the launch of its planned first diesel [1] for the United States. The diesel-powered Acura TSX will be pushed back to 2010 from 2009, and some reports claim the company’s U.S. diesel program may be canceled completely.

The main reason for the delay is cost. Honda claims the expense of creating a diesel engine to meet California’s emissions standards—allowing it to be sold in all 50 states—has increased to more than $5,000 above a comparable gasoline-powered version.

The Japanese newspaper, Nikkei, said Honda is seeking to develop new catalytic converter technology that uses less platinum in order to keep prices down.

“We have to proceed cautiously in this environment.”

Honda spokesperson

In addition to cost factors, Honda has been unable to produce the diesel model with an automatic transmission that would pass emissions standards. Honda was not ready to move forward with marketing only a manual model in the American market.

The engine in question is a new version of Honda’s 4-cylinder 2.2-liter, i-DTEC engine. In Europe, where it’s sold in the Honda Accord—a model known as the Acura TSX in the US—the engine provides 188 horsepower, and more than 250 foot-pounds of torque.

Honda’s change of direction will send its engineers back to the diesel drawing board. In the meantime, Honda is said to already be working on a V-6 diesel that could be used in larger vehicles such as the Pilot SUV, Odyssey minivan, and Ridgeline small pickup.

Reuters recently reported that Honda also based its decision to delay [2] on the high cost of diesel fuel. With diesel prices higher than gasoline and weakening overall vehicle demand, Honda officials argued it was not the right time to roll out a more expensive new model, even with spectacular fuel economy. The European model gets more than 60 miles to the gallon in EU driving tests.

Source;
http://www.hybridcars.com/print/25245