ANALYSIS - Diesel Poised for a Comeback in Japan?
Date: 06-Mar-06
Country: JAPAN
Author: Chang-Ran Kim, Asia auto correspondent
The magic ingredient? A diesel engine.
Touted for their torque and fuel economy, diesel-powered cars now make up half the European market but have long since lost street credit in Japan, where, after a series of tax changes and a damaging image campaign, just a single model remains on sale.
But diesel-savvy European car makers, cheered by a growing acceptance in the United States and the arrival of cleaner fuel, are gearing up to reverse that trend in a move that could force domestic brands to follow suit and stir up the world's third-biggest car market.
A comeback by diesels could also give European brands -- long the underdogs with just 4 percent of Japan's car market -- a welcome boost, help domestic oil refiners cut their losses by creating a better balance of gasoline and diesel supply, nudge Japan closer to a UN-mandated goal of cutting greenhouse gases, and provide a boon for diesel-parts makers such as Bosch and Ibiden Co.
"You can buy practically anything in Japan, but not diesel cars," said Himei, a native of Okayama, who drove a gasoline 307 before buying his used diesel version online.
"It's high time Japan woke up to its merits."
DIESEL DEMISE
It wasn't always so.
In 1990, diesel powered 6.4 percent of all new cars sold in Japan. But a law in 1992 lowering the limit on emissions of smog-forming nitrogen oxide -- a major byproduct when burning diesel fuel -- and tax changes that effectively narrowed the cost advantage of diesel fuel and made diesel cars more expensive, prompted a steady downturn in demand.
In 1999 came the death blow from Tokyo's celebrity governor.
Kicking off a campaign to wipe diesel cars off the capital's streets, Shintaro Ishihara, in a widely televised stunt, waved a bottle containing black particles of carcinogenic soot that are emitted in greater quantity by diesels than gasoline vehicles.
The effect was immediate.
As the Japanese public increasingly shunned the powertrain, auto makers pulled back their offerings, and by 2003 there were only 10 models versus 24 a year earlier.
Now, only Toyota Motor Corp.'s Landcruiser Prado remains, while buyers can choose from some 200 gasoline models.
MERCEDES STEPS UP
That will change this fall. In Japan's first new diesel car launch in four years, DaimlerChrysler's Mercedes brand will roll out a diesel E-Class and has promised more to come.
"We're optimistic about diesels' prospects here," said Hans Tempel, head of DaimlerChrysler Japan.
Other diesel advocates such as Volkswagen -- which now offers the powertrain on its entire US product line -- and France's Peugeot are also eager to test the water, although they have yet to announce concrete plans.
"DaimlerChrysler's launch in Japan puts pressure on us to move," said VW Japan spokeswoman Dorothea Gasztner, adding a decision on whether to offer a diesel car in Japan would be made "very soon".
German auto industry association VDA says it will pitch an aggressive campaign to dash negative misperceptions about diesels in Japan, promoting them as a clean and effective tool for reducing oil consumption and carbon dioxide emissions.
"Since diesels are on average 25 percent more efficient than gasoline engines, Japan could save 26 billion litres of fuel per year if only diesel engines were used instead of gasoline engines," VDA President Bernd Gottschalk told Japanese reporters in Geneva earlier this week.
DOMESTICS WAIT IN WINGS
Domestic auto makers, meanwhile, say they will gauge customer reaction before plunging in again, but admit diesels' resurgence is probably on the cards.
"We'll push hybrids with full force, but we'll also be ready if there is a move towards diesel," said Toyota Executive Vice President Kazuo Okamoto, acknowledging that today's diesels, fitted with particulate filters and other advanced technology, were a far cry from the loud, smoke-spewing monsters th
