Europeans, Japanese intensify hybrid, diesel debate

TOKYO -- The debate is sharpening on whether diesels or hybrids is the best answer for more environmentally friendly vehicles.

On one side are Japanese manufacturers, who dominated the Tokyo auto show last month with displays of gasoline-electric hybrid cars. Only Honda didn't display a new hybrid concept -- and it already sells a hybrid in Europe and Japan.

On the other side, European automakers say their modern diesel engines are the best approach to reducing vehicle emissions, including CO2. They complained that the Japanese approach is motivated more by politics than science.

The same local markets, export strategies and regulatory climates that have created the European and Japanese automakers' differing approaches will continue to shape their responses. But each side is getting louder in defending its position.

"We do not need hybrids," says Georges Douin, Renault executive vice president of strategic product planning, international operations. "Our Clio diesel is the most fuel-efficient car on the market, with just 114 grams per kilometer of CO2."

But Japanese automakers pointedly argue that while diesel technology can lower CO2 emission levels, it can't meet future nitrogen oxide emission rules.

"For the coming future -- the next three to five years -- the diesel will stay in Europe. Beyond that, the question is still open," says Guillame Gerondeau, Nissan vice president for product strategy and product planning.

Douin adds: "It does not make sense to show cars which are not sellable."

But Toyota's second-generation Prius hybrid model, which goes on sale in Europe next month, has an even lower CO2 emission than the Clio.

Each side is defending what it considers as a strategic advantage in technology. European automakers generally lead in diesel technology, not surprising when home market sales are more than 40 percent diesel.

Japanese automakers have substantially invested in hybrid technology to satisfy local demand for clean, economical vehicles and meet future California near-zero emission rules in Japan's No. 1 export market.

But regional legislation also has shaped the approaches. Japanese and US law stresses reducing specific toxins including NOx, but largely does not regulate CO2, which scientists have linked to global warming.

Regional differences

European regulations focus on reducing CO2 emissions, with less emphasis on toxins so far. EU carmakers have voluntarily committed to reduce corporate average car CO2 emissions to 140 grams per kilometer in 2008, and to 120 grams per kilometer in 2012. Japanese and Korean carmakers have a similar commitment, but one year later for each level.

Both Honda and Toyota are targeting substantial hybrid volumes within five years.

"It will be around 5 percent of our total output," says Honda CEO Takeo Fukui.

By 2006, Toyota also expects to sell an annual 5 percent of its total annual production volume, about 300,000 units. "Probably a bit less in Europe, because of the popularity of diesels [there]," says Yoshio Ishizaka, executive vice president for overseas operations.

Japanese auto executives say diesels are a dead-end technology environmentally.

"When equipped with all future after-treatment equipment, diesel cars will become as expensive as hybrid cars," says Katsuhiko Hirose, hybrid project general manager for Toyota.

In contrast, Volkswagen doesn't believe in hybrids.

"We will only develop them when we are forced [to do so]," says Wilfried Bockelmann, VW brand board member responsible for development. "And if so, the ideal hybrid system will be combined with a diesel engine."

Renault, PSA/Peugeot-Citroen and DaimlerChrysler share Bockelmann's opinion. PSA is developing so-called mild hybrid systems using diesel engines. PSA hybrid models were supposed to have gone on sale earlier this year.

Renault plans

Renault's Douin says diesel-hybrid systems are being considered.

"We have discussed this many times, then postponed," Douin says. "We may decide on this one or two years from now. But we won't offer them for sale before three or four years from now."

But diesel-electric hybrids probably won't make it into the USA, because of different emission legislation.

"That is because of the poor quality of diesel fuel in the USA, where sulfur content is 300 times as high as in Europe," says Wolfgang Scheunemann, spokesman for technological and environmental issues at DaimlerChrysler. "Diesel is the fastest way to reduce fuel consumption and related CO2 emissions."

But NOx emissions must be reduced before diesels can make it to the USA. Toyota is currently the only carmaker to offer a combined particulate filter and catalytic converter to reduce NOx.

At Toyota, gasoline-electric hybrids are the primary thrust.

"Gas-electric hybrid is the core technology for Toyota," says company President Fujio Cho. "We have to think about NOx, and sooner or later regulations will become stricter everywhere."

Akihiko Saito, Toyota's executive vice president overseeing design, engineering and product development, is more blunt.

"Diesel-based hybrids are not economically feasible, because diesels require an additional catalyst for particulate emissions," he says. "Even if the cost of diesels came down, you would still have to look closely at how a diesel-electric hybrid could compare to a gas-electric hybrid."

James B. Treece contributed