Automotive News - October 13, 2008 - (Page 38) OCTOBER 13, 2008 • 45 continued from previous page ager of powertrain forecasting at J.D. Power and Associates. “It might also force Toyota, GM and everyone else to lower their hybrid premiums.” EVs? No, thanks Honda also stands alone on electric vehicles, which many see as the future of automobiles. It pooh-poohs plugins and says today’s lithium ion batteries are too wimpy for practical use. But Nissan, Mitsubishi, Toyota and Subaru seem undeterred. They plan electric vehicles in the next five years. Those cars will feature lithium ion batteries and have full-charge ranges of around 60 miles. GM is planning its Volt plug-in hybrid car for 2010. Says Honda’s Kato: “Our stance is that the use of electric vehicles is limited. To get the performance of an Accord, in terms of driving range, from today’s battery-only drivetrain, we would need to carry 2 tons of batteries. That’s no good.” In what critics call an even greater leap of faith, Honda is banking on hydrogen fuel cells as its future hightech drivetrain. But even those rely on next-generation lithium ion batteries. through in these technologies. The company already is playing catch-up in the hybrid race with Toyota and can ill-afford another firstmover stumble. Honda easily could find itself pinched for sourcing if supply gets tight and it has to rely on a competitor’s joint venture for lithium ion batteries, one of the car’s most important components. “Honda could well be at a distinct disadvantage,” says Michael WynnWilliams, a Japanese auto industry analyst at Global Insight. “Honda offers a lot of models that are designed for the urban environment and so could lose out to the growth in electric vehicles.” R&D chief Kato is unfazed. Honda has the technological and engineering firepower to roll out almost any vehi- cle to match the market, be it electric, hybrid, diesel or fuel cell, he says. And after years of booking record profits, Honda certainly has the money to back it up. The automaker spent ¥587.9 billion ($5.49 billion) on r&d last year and plans to boost that 4.6 percent to ¥615 billion ($5.75 billion) this year. The outlay is more than double that of a decade ago, when a much smaller Honda was debating V-8s and pickups. Meanwhile, Honda will stick to affordable, fuel-efficient cars. “Some manufacturers are going full steam ahead with electric vehicles and/or plug-ins to counter their image as producers of gas-guzzling vehicles,” says Omotoso. “Desperate times call for desperate measures, but Honda isn’t desperate.” c Oddly, Honda embraces V-10 TOKYO — A Honda V-8 may be dead in the water. But a V-10? That’s another matter. Honda wants 10 cylinders for the company’s upcoming super sports car, the NSX, says Executive Vice President Koichi Kondo. “This sort of discussion was made between the American Honda people and r&d people, and some people were questioning whether it’s really necessary to have a V-10,” Kondo says. “But sports is a special category. We said if we’re going to do it, we’re going to go to the extreme.” But high performance won’t mean high volume. Kondo expects to sell just 1,000 units a year of the NSX in the United States, where Honda plans to launch the sports car first. The NSX is expected to debut for the 2011 model year. The car will be priced higher than Nissan Motor Co.’s GT-R but also have better performance, Kondo says. The GT-R starts at around $70,000 and has a turbocharged, 3.8-liter V-6. The last NSX incarnation had a V-6 midengine layout when it was dropped in 2005. — Hans Greimel Fears of commitment In another divergent strategy, Honda has no partnerships with electronics companies to build those sorely needed lithium ion batteries. Honda is sourcing current-generation nickel-metal hydride batteries from Matsushita Electric Industrial Co. and Sanyo Electric Co. In contrast, Nissan has teamed with NEC Corp. on lithium ion batteries, Toyota is tied up with Matsushita, and Mitsubishi Motors Corp. has GS Yuasa. What’s more, Honda is alone among those automakers in having no public plans to produce a car riding on lithium ion batteries, save its limited-edition FCX Clarity fuel cell sedan. The technology is simply too immature to commit, says Honda CEO Takeo Fukui. Any one of those battery joint ventures could end up the front-runner, so why commit now? Plus, safety concerns remain about lithium ion batteries overheating and catching fire. Proponents of Honda’s green-car approach say it parallels the company’s earlier dismissal of full-sized pickups and V-8 engines. The automaker is prudent, conservative and focused on cost containment and fuel efficiency. The driving question is what is doable with the resources available. “They are remarkably consistent,” says JPMorgan’s Nakanishi. “I think it’s a very successful approach.” Yet even for Honda, there are plenty of potential pitfalls. Its pursuit of small hybrids may yield only limited returns. Small cars, such as the Fit, already get excellent mileage — 35 mpg on the highway and 28 in the city. So will budget-conscious drivers want to pay a hybrid premium for fuel efficiency that might only be marginally better? Omotoso of J.D. Power thinks they might, if Honda reduces the hybrid premium to around $1,250 instead of a gap of $10,000 for hybrids using lithium ion batteries. “Running a business and building a new facility at the same time is very demanding. Our relationship with Federated allows us to concentrate on our business, knowing that we are protected and secure from outside events that could seriously impact our bottom line.” JR Smart Smart Motors Madison, Wisconsin Risky business Still, Honda’s cautious attitude toward electric cars and lithium ion batteries could relegate it to an alsoran if someone else makes a breakThe FEDERATED Insurance Companies Home Office: 121 East Park Square, Owatonna, Minnesota 55060 (507) 455-5200 • www.federatedinsurance.com http://www.imalookerdealer.com http://www.profitWithCOP.com http://www.profitWithCOP.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.