Global Insight Perspective | |
Significance | Honda has developed a new "superclean" diesel engine technology that it says will comply with the latest emissions legislation in the United States, Tier ll Bin 5. |
Implications | Rising fuel prices and a growing awareness of the benefits of diesel-engine technology could see the Japanese carmaker gain a competitive advantage over its rivals in marketing diesel passenger cars in the United States. |
Outlook | Although diesel has traditionally struggled to make inroads into the U.S. auto market, rising fuel prices and constantly improving technology mean that diesel could be about to make a big impact in the country. Honda's new "superclean" diesel engines will also provide the company with a significant boost in the European market, where half of all new cars run on diesel, |
Honda Raises the Bar with New Diesel Technology
Japan's third-largest carmaker, Honda, has once again demonstrated its engine technology prowess by announcing the development of a range of new "superclean" diesel engines. Honda is developing the engines to comply with the latest stringent emissions standards in the United States, the Environmental Protection Agency's Tier II Bin 5 diesel-emission regulation, as well as even more exacting legislation in the state of California. Honda is planning to launch a passenger car, likely to be a variant of the Accord sedan, featuring the new technology in the United States by 2009. The company's existing 2.2-litre i-CTDi passenger car diesel unit will be the first recipient of the system. The new technology uses an advanced catalytic converter which further reduces nitrogen oxide (NOx) emissions. High NOx and particulate emissions have traditionally held back the wider use of diesel engines globally, and especially in the United States. However, enormous advances have been made in the tractability and performance of diesel passenger car engines in the past decade with the advent of common-rail fuel-injection technology, and now it appears that Honda has gone a long way towards eradicating environmental objections.
Honda Wants to Make Diesel Viable in the U.S.
Speaking at the launch of the new diesel system at Honda's Tochigi technical centre north of Tokyo, the company's chief executive officer (CEO), Takeo Fukui, said, "We want to change the image of diesels in the U.S.". He also announced that Honda is working on a bigger V6 diesel engine to supplement the existing 2.2-litre unit for use in larger vehicles. It is likely that Honda would look to use the new V6 in bigger vehicles such as the Pilot and Acura MDX sports-utility vehicles (SUVs), as well as the new Legend premium sedan. Fukui also outlined Honda's philosophy on the merits of diesel engines in comparison to gasoline (petrol)-electric hybrids. He added, "Gasoline-electric hybrids work well in small cars. But with bigger vehicles than the Accord, we think superclean diesels are a much better way to go."
Outlook and Implications
Honda has long been one of the world's leaders in conventional gasoline engine technology. Now the company is also applying its impressive research and development (R&D) resources to diesel engines. Prior to the 2.2-litre i-CTDi unit in 2003, Honda had never made a passenger car diesel unit, and the fact that the engine is close to the class-leading benchmark speaks volumes. DaimlerChrysler (DCX) and Volkswagen (VW) already sell diesel-engined passenger cars in the United States and interest is growing. Cleaner fuel and improved fuel-injection and emissions technology are allowing diesels to gain ground in the United States. In 2005, VW sold more than 29,000 diesel-powered cars in the United States, and the company claims it could have sold more.
Honda can see the potential of diesel in the United States, and this new advanced catalytic converter technology could give the company a useful competitive advantage. General Motors (GM) has also developed a clean diesel technology to comply with the latest emissions standards. However, GM's system uses urea, an ammonia-based fluid, in a converter to turn NOx emissions into oxygen and water. As a result, GM's system uses a separate tank for urea. Honda claims its system is much simpler than GM's as it uses a new catalytic converter with a two-layer structure, with no need for a separate tank.
Honda's new "superclean" diesel engine will also potentially provide a major boost to the company's European operations. Around half the new cars sold in Western Europe are powered by diesel and Honda has gradually made its presence felt over the last three years following the launch of the 2.2-litre i-CTDi unit in the Accord and Civic. European car buyers have long been convinced of the cost and useable performance advantages of modern common-rail diesel technology. If Honda has significantly addressed the issue of NOx and particulate emissions, this could prove a significant competitive advantage in Europe.