LONDON -- Honda cautiously welcomes surging sales of its diesel cars.
The challenge the Japanese automaker faces in Europe is to keep growing its diesel share without hurting sales of its gasoline-powered vehicles, said Paul Ormond, a Honda UK spokesman.
Honda expects the diesel to help increase annual sales in Europe to 350,000 units within four years.
To reach the goal, Honda will produce diesel engines at its plant in Swindon, England. The company also is doubling it diesel production capacity in Japan to 70,000 units.
Honda diesel penetration in the European market through the first nine months was 13.2 percent on total sales of 202,000 units, up from 5.5 percent on sales of 194,500 units during the same period a year ago.
Honda's diesel production in Swindon has been planned to utilize the existing plant and work force.
"New investment will be minimal, possibly less than £1 million (E1.45 million), with no major increase in jobs," Ormond said.
"The plan will be to integrate the new engine into existing procedures initially in a fairly low-key way, and to create expertise from the existing work force of 4,000," he said.
Sales of the Honda Accord have jumped 51.3 percent to 40,748 units in Europe after nine months thanks to the addition of a diesel. The company's 2.2-liter aluminum common-rail engine debuted in the Accord in January.
Honda's new diesel engines will initially be shipped to the UK from its plant in Takanazawa, Japan.
They will be assembled on the Swindon lines alongside gasoline engines by the end of 2005. Major components for the engine eventually could be sourced from Swindon, which has basic manufacturing facilities including a foundry.
The new diesel will be fitted in the CR-V SUV starting in January 2005. Toward the end of 2005, the engine will also be fitted into the UK-built lower-medium Civic, which offers a 1.7-liter Isuzu-supplied diesel that also is in the Honda FR-V.