Atsuo Ito doesn’t have fond memories of one of his first rides. “I remember the diesel car I used in driving school 22 years ago—a noisy, dirty one that produced smoke and soot,” recalls the 39-year-old advertising executive in Tokyo. He’s driven gasoline-powered vehicles ever since—until now. Ito recently bought a new Mazda Diesel CX-5 crossover. “This car is quiet, clean, and most important, it cut my monthly fuel expense by half,” Ito says.
Thirteen years ago, Tokyo’s governor destroyed Japanese interest in diesel vehicles by banning all but those that installed exhaust fume purifiers from roads in the nation’s largest city. Now the cars are making a comeback as manufacturers adopt technology that make them more eco-friendly. Hiroshima-based Mazda Motor is betting big on cleaner diesel engines for its home market, building new models to compete with diesel-powered sport-utility vehicles from Nissan Motor (NSANY) and Mitsubishi Motor and models that BMW (BMW) and Daimler’s (DAI) Mercedes-Benz unit have started shipping from Europe, where half of all new cars run on diesel.
Improved filters, turbochargers, and fuel injection have helped make the motors quieter and cleaner. As part of its support of more fuel-efficient vehicles, Japan’s government this year introduced subsidies of as much as 180,000 yen ($2,200) for clean diesels. By 2020 it wants to convert 5 percent of new passenger vehicles, up from 0.4 percent last year. As of October, sales of diesels had tripled from last year to 31,425 vehicles in Japan, according to the Japan Automotive Dealers Association. “The idea younger people have of diesel cars is quite different from the elder generation,” says Yoshiaki Kawano, an analyst with IHS Automotive (IHS) in Tokyo. “Their impression is that the cars are environmentally friendly and popular in Europe.”
Mazda says 80 percent of orders for its CX-5 sport-utility vehicle and Mazda6 sedan in Japan this year are powered by diesel engines even though diesels cost about 20 percent more than their comparable gasoline versions. A diesel CX-5 gets 18.6 kilometers per liter (43.7 miles per gallon), 16 percent more than the gasoline version. “We have been surprised to see such brisk demand,” Mazda President Takashi Yamanouchi said in November. Customers are “convinced that they want diesels.”
Global sales of diesel cars will rise 66 percent between 2010 and 2018, to 22 million, making up about 18 percent of total vehicle deliveries in 2018, according to LMC Automotive. Growth will come mainly from North America, Eastern Europe, and Asia. LMC Automotive expects diesel sales in the U.S. to more than triple to 1.3 million in 2018 from 408,344 last year as stricter federal fuel efficiency standards are phased in starting in 2017. The diesel Mazda6 will be introduced in the U.S. next year, making Mazda the first Asian carmaker to sell a passenger car using the engines in the American market, where European makers such as Volkswagen (VOW) currently set the pace for the technology.
The bottom line: Only 0.4 percent of Japan’s autos were diesels last year. The government wants to boost that to 5 percent by 2020.
