Do diesels REALLY cost 50% more to produce?

A top executive at Honda Motor Co. said on Monday profit margins would inevitably fall as more advanced vehicles spread through the market, but he stressed that skimping on R&D costs would do greater harm in the long run.

Japan's third-biggest auto maker last month outlined plans to reduce its cars' carbon dioxide emissions by an average 10 percent by 2010 compared with 2000 levels, mainly by developing more efficient gasoline engines, clean diesel engines and improving its hybrid powertrain.

Diesel and hybrid-powered vehicles are said to cost as much as 50 percent more than conventional gasoline cars to produce, and generally yield smaller profits for auto makers.

AUTO SPIES PERSPECTIVE: We can believe that a hybrid could could up to 50% more to produce but a diesel? That's a hard one to swallow!

Full article here

PlanoA4 - 6/13/2006 3:24:05 PM

+1 Boost

Honda develops everything in house when it comes to powertrains. While this sounds good. They are falling behind in Hybrid and Diesel because of it. Collaborate and you can get it to market sooner.

PlanoA4 - 6/13/2006 4:03:11 PM

+1 Boost

Well it does say "Diesel and hybrid-powered vehicles are said to cost as much as 50 percent more than conventional gasoline cars to produce"

The context was that they really were reluctant to take that plunge. Toyota has stated debore they make no money currently on their hybrids, it is a losing venture at this point in the ball game.

dblo7 - 6/13/2006 4:26:19 PM

+1 Boost

Well the prius goes beyond making profit. It helps make Toyota a company of innovation and environmentally friendly in the eyes of the consumer. Which in the long term will only improve total sales and positive perception.

Diesels are a big option expense and hard to justify if not needed. My diesel markup for my F250 6.0 was $5200 compared to $400 for the V10. The technology has been around just as long as gasoline and I believe the cost of diesel developement mainly is focused on EGR and emissions.

chewy - 6/13/2006 8:01:31 PM

+1 Boost

Don't know the answer to the question, but here is an interesting link to read.

http://www.autonews.com/apps/pbcs.dll/article?AID=/20060605/FREE/60601044/1111

PlanoA4 - 6/14/2006 9:20:51 AM

+1 Boost

Prius and Hybrids are not profitable for Toyota yet, HOWEVER they are a tremendous sales tool. How many people come in for a Prius and walk out with something else? I would bank on a lot of them. Easy to do when they are back ordered or marked up. Toyota has stolen Hondas thunder when it comes to Hydrids, better marketing.

The smaller car diesels are a bit less costly than your F250, VW is about a $3700 premium from the base to the diesel.

The Base Accord to Hybrid though is a $12675 jump or even a $5890 jump from a V6 model.

So cost justification of a hybrid is even more difficult than a diesel. Those who think they are saving money buying a hybrid better plan on holding on to it for at least 6 to 10 years.

woood - 6/14/2006 9:55:43 AM

+1 Boost

Honda just says that because they dont have diesel engines in mass prod. I think diesels make more sense if you drive around all day everyday. It burns slower than gasoline.

PlanoA4 - 6/14/2006 10:17:09 AM

+1 Boost

They have sold them overseas for quite sometime, just not here. So they could have brought them over.

http://www.carpages.co.uk/honda/honda_diesel_sets_new_world_records_12_05_04.asp

from 2004