Mazda drives ahead with US diesel car launch

Mazda is charging ahead on a lonely effort to launch diesel cars in the US next year, undeterred by the fallout from the Volkswagen emissions scandal.

Under pressure to meet stricter fuel economy regulations worldwide, Japan’s fifth-largest carmaker is also planning to introduce an electric vehicle by 2019 — but with an unlikely caveat. The company is working to develop a range extender using its rotary engine technology to recharge the battery before it runs out.

“We can’t just make an electric vehicle, it has to be one that will be accepted by Mazda fans,” said Masamichi Kogai, chief executive. The compact rotary engine will “be an attraction original to Mazda”, he added.

Mazda is planning to install its 2.2-litre diesel engine in the new-generation CX-5 crossover, which was revealed at the Los Angeles auto show on Wednesday.

The launch will come five years behind its original target of 2012, after the company struggled to balance driving performance with the need to meet stringent US regulations for nitrogen oxide emissions.

The new CX-5 awaits official fuel economy rating from US authorities, but Mr Kogai said it would be among the most fuel efficient in the sport utility vehicle segment, including hybrids.

Diesel, the most popular source of power for engines in Europe’s cars, faces tough questions over its long-term viability because of concerns over emissions of harmful nitrogen oxides.

The increasing focus on battery-powered cars was underscored as Volkswagen, Renault, General Motor’s Opel and Daimler’s Mercedes-Benz all revealed electric models during the Paris motor show in September.

In the US, diesel accounts for 2.5 per cent of new vehicle sales compared with about 3 per cent before the Volkswagen scandal broke last year, according to Mr Kogai.

But Mazda executives say diesel still has the potential for larger-sized cars and pick-up trucks while electric vehicles face issues in terms of the high price and limits to driving range.

Mazda is known for its strategy of targeting niche demand and it hopes to replicate the success that it had in expanding the diesel market in Japan following the launch of its SkyActiv-D clean diesel engines in 2012. Since then, Mr Kogai said diesel penetration in Japan has risen from less than 1 per cent to 8 per cent, of which half is sold by Mazda.

In addition to diesel and electric vehicles, the company is also aiming to launch a plug-in hybrid vehicle as early as in 2021. It is also considering working with Toyota on electric drive technologies although few details have been disclosed on the technology tie-up between the two carmakers.

But analysts said Mazda may be stretching its resources by providing a near full line-up of fuel-efficient cars especially since it remains the only automotive manufacturer to continue developing the Wankel rotary engine.

“Mazda is doing too much on its own with diesel, EVs, plug-in hybrids plus rotary engines. In many ways, Mazda is unable to let go of its fascination with rotary engines,” said Takaki Nakanishi, a former Merrill Lynch analyst who now runs his own research group.