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Mazda plans diesel CX-5, EV, plug-in hybrid under fuel-efficiency push

Mazda's revamped 2.2-liter Skyactiv-D clean diesel engine, tweaked to meet more stringent U.S. regulations for nitrogen oxide emissions, will be offered in the second-generation CX-5 in the second half of 2017. Photo credit: BLOOMBERG

TOKYO -- After four years of delays, Mazda Motor Corp. says it will make good on its plan to bring diesel vehicles to the United States, announcing today it will introduce the technology in the new-generation CX-5 crossover next year.

As part of a diversification drive, Mazda also will introduce an electric vehicle in 2019 and a plug-in hybrid vehicle in 2021 or later, to meet increasingly stringent fuel economy rules.

CEO Masamichi Kogai said his company, one of Japan's smallest carmakers, has cracked the equation of balancing driving performance with clean emissions that had held up a U.S. diesel launch ever since Mazda said in 2010 it would bring its Skyactiv-D engines stateside in 2012.

A revamped 2.2-liter Skyactiv-D clean diesel engine, tweaked to meet more stringent U.S. regulations for nitrogen oxide emissions, will be offered in the second-generation CX-5 in the second half of 2017, Kogai said. The next CX-5 debuted Tuesday at the Los Angeles Auto Show.

The EPA must still give an official fuel economy rating for the CX-5 diesel. But Kogai said it would be among the most fuel efficient rides in the small crossover segment, including hybrids.

Diesel delays

Mazda's 2010 plan was delayed three times over the past four years. The introduction next year would mark a major milestone for Mazda's line of Skyactiv engines, transmissions and lightweight platforms. Having a clean diesel in the mix was originally envisioned as Mazda's cost-effective, fuel efficient answer to the expensive hybrid drivetrains being developed by rival carmakers with much deeper pockets.

But the plan was stymied from the get-go by more stringent U.S. emission rules. Skyactiv-D grew in popularity in other markets, such as Japan and Europe, but Mazda said it was unable to deliver the same level of torque and acceleration while meeting U.S. regulations.

"Three times after that, we had to postpone the introduction timing, so that disappointed dealers and customers," Kogai said of the original plan. "We wanted to make the breakthrough this time."

The diesel launch, combined with Mazda's announcements of a new electric vehicle and plug-in hybrid, underscore the regulatory pressure on companies to roll out new powertrain solutions.

Mazda is targeting a 2019 debut of the EV specifically to meet California's zero-emissions vehicle mandate, which have been adopted by several other states. But Kogai said it would be a global offering.

He did not offer details on which vehicle segment the EV or plug-in might be. Mazda may work with partner Toyota Motor Corp. to develop some of the EV technologies, Kogai said.

No compromises

He promised that the new diesel setup makes no compromises on performance or emissions.

The fix came through adding a urea selective catalytic reduction, or SCR, treatment to scrub the exhaust of nitrogen oxides, Kogai said. Mazda was able to develop a compact SCR unit that not only reduced its cost but also reduced its impact on engine performance, he said. Further gains in performance came through various tweaks to reduce friction throughout the drivetrain.

Mazda spent five years measuring customer feedback to develop the upgrades to the North American diesel engine so that it would be sporty and clean, Kogai said.

Mazda is well aware of the uphill battle in convincing U.S. consumers of the charms of diesel now, after Volkswagen AG's diesel emissions violations tainted the technology's image.

Clean diesels account for only around 2.5 percent of the U.S. light-vehicle market, Kogai reckons.

But Mazda has high hopes for running the playbook it used in Japan, where consumers were long turned off by diesel's reputation for sooty exhaust and rackety engines.

Before Mazda introduced the first Skyactiv-D engines in Europe in 2011 and then in Japan the following year, diesel penetration was just 1 percent of the Japanese market, where buyers are more enthralled with hybrids. But Japanese consumers gradually warmed to the technology.

Diesels now represent 8 percent of the Japanese market, and Mazda claims about half that volume, Kogai said. Mazda now offers diesel versions of its Mazda2 subcompact, Mazda3 small car, Mazda6 sedan and CX-3 compact crossover, in addition to the CX-5. Diesels account for about 36 percent of Mazda's total volume in Japan.

Last year, Mazda sold 103,771 diesel vehicles in Japan and 182,758 worldwide.

Global ramp up

Kogai pitched the diesel CX-5 as being especially suited to snowy northern states, where the vehicle's all-wheel-drive option adds weight that can reduce fuel economy and spunk. The high-torque clean design engine, he said, counters both drawbacks and boosts hill climbing power.

The stakes are high for the CX-5 because it is Mazda's best-selling vehicle, accounting for a quarter of the company's global sales. With the next generation, Mazda hopes to sell an average of 400,000 CX-5s a year worldwide over the course of its life. Last year, Mazda sold 370,000.

"The CX-5 is a very important vehicle," Kogai said, adding that demand for the outgoing vehicle is greater than supply. "Now we will increase our competitiveness with the full model change."

U.S. sales of the CX-5 were flat at 91,381 units through October this year.

To make room for increased output at the Hiroshima assembly plant that manufactures the CX-5, Mazda will shift some CX-3 compact crossover production from Hiroshima to its Hofu plant. Hiroshima has an annual production capacity of 589,000 vehicles, while Hofu can make some 416,000. Both factories are already running near maximum capacity. The CX-5 is also produced in China and on a knock-down basis at factories in Malaysia, Vietnam and Russia.

You can reach Hans Greimel at hgreimel@crain.com -- Follow Hans on Twitter: @hansgreimel

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