KYOTO, Japan - Mitsubishi Motors Corp.'s engine plant in this ancient Japanese capital is gearing up to build 40,000 gasoline direct-injection engines a month starting in May, up from 30,000 a month now. More production jumps will follow.
Just two years after it launched the engine, Mitsubishi expects to have the powerplant available on 70 percent of all cars it sells in Japan this year.
A version will show up in the United States this year, possibly as a V-6 on the Montero or Montero Sport. A V-8 is due 'rather shortly,' says T. Kijima, Mitsubishi's deputy corporate general manager for engine development.
Eventually, Mitsubishi sees the gasoline direct-injection engine becoming its primary powerplant worldwide. Indeed, not since Mazda Motor Corp. and the rotary engine has a carmaker placed such a huge bet on new engine technology.
'They believe the GDI will be the only driver to support the company's survival,' says Kaoru Kurata, auto analyst at Goldman Sachs (Japan) Ltd. 'So far, though, it is a very unprofitable strategy for them.'
To be sure, Mitsubishi's gasoline direct-injection engine has not run into any problems as severe as those that knocked out the rotary. But flaws in the company's strategy are showing.
By injecting gasoline directly into the combustion chamber under high pressure, rather than using the piston's down stroke to pull in the fuel, the gasoline direct-injection engine boosts power and cuts emissions.
Under a Japanese test designed to simulate stop-and-go city driving, Mitsubishi says its 1.8-liter gasoline direct-injection engine cut fuel consumption and carbon dioxide emissions by 33 percent over a comparable displacement nongasoline direct-injection engine, while raising power by about 10 percent.
The gasoline direct-injection engine is thus more cost-effective in cutting CO2, a contributor to global warming, than either electric or hybrid cars. The production and later disposal of the batteries in those cars present environmental problems.
'GDI is a pretty well balanced technology to reduce CO2 at a modest cost,' says Takaki Nakanishi, auto analyst at Merrill Lynch Japan.
Mitsubishi will meet Japan's proposed CO2 cuts in 2005, five years before new rules take effect, says Kijima. Doing so, the carmaker hopes, will position it as an environmental leader.
The gasoline direct-injection engine, therefore, is seen as a way to stand out from the pack, just as the rotary set Mazda apart.
'I understand why they're trying to differentiate themselves in the marketplace, but the strategy is not working,' says Edward Brogan, Tokyo-based auto analyst for Salomon Brothers Asia.
NO MORE HALO
Brogan points out that a rush of new hybrid vehicles and diesel direct-injection engines from other makers has taken the halo of distinctiveness off the gasoline direct-injection engine.
'The window of opportunity to push this as something new has been closing,' says Brogan.
And because of cheap gasoline prices in the United States and falling prices in Japan, the gasoline direct-injection engine is a tough sell.
'Mitsubishi's largest miscalculation is probably consumers' attitude toward good mileage vehicles,' says Nakanishi. Buyers are not willing to pay extra for fuel economy, he says.
Moreover, consumers do not always see the promised extra mileage. Because it is tuned for stop-and-go driving, the gasoline direct-injection engine does not deliver better fuel economy to those who favor jackrabbit starts or highway cruising.
For example, Mitsubishi ads claim a 30 percent boost in fuel economy for a gasoline direct-injection engine-equipped Chariot microvan. But only one model delivers that large a gain - a stripped version lightened by the absence of all options, including the radio.
The average model gets 22 percent better mileage - good, but not what the ads tout.
'Our research showed that around 80 percent of customers are quite satisfied with our fuel economy,' Kijima says. The dissatisfied 20 percent do not understand how to use the technology, he says.
HOLD THE SULFUR
The gasoline direct-injection engine also is finicky about its fuel. High-sulfur gas wreaks havoc with the catalyst in the original gasoline direct-injection engine. That is a major problem in the United States, where only California offers low-sulfur gasoline, and parts of Europe.
In response, Mitsubishi will offer two versions of its gasoline direct-injection engine in America, with different catalysts for California and the other 49 states.
The catalyst Mitsubishi planned to use in the other 49 states impinges on a Toyota patent, however. The two companies now are negotiating over Mitsubishi's licensing fees for the patent.
Most analysts agree that the fees are unlikely to be major. Yet even Merrill Lynch's Nakanishi, who likes the gasoline direct-injection engine's long-term potential, worries that Mitsubishi faces 'a lot of risk in the short-term, and lot of cost burdens to overcome.'