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Mazda's product roadmap after Skyactiv-X: diesel, rotary, hybrids, even EVs

When we first heard that Mazda had cleared the major hurdles on gasoline compression ignition, and were just tidying up the details with clear production intent, the first kneejerk thought was: That's it for Mazda's consumer diesel. In particular, the Skyactiv-D that was intended for sale in the U.S., only to be delayed for years by various regulatory roadblocks and other issues that Mazda is frustratingly (but understandably) vague on. At least, it'd die out at some point down the road once Skyactiv-X was widely available. It turns out that's not the case at all. Mazda will adopt an approach that becomes more and more electrified and diverse the closer you get to 2035. But internal combustion will play a deep and central role up to that point, and probably beyond. Before we get to what those different powertrains, diesel and electrified, will look like down the road, let's stop and think about Mazda's philosophy. It couldn't be more different from the approach of most manufacturers that are currently producing BEVs and hybrids, which are heavily incentivized by both the automakers and the government, both state and local, depending on the locality. Even with all that cash on top of the hood, the market penetration of electrified vehicles is low. Mazda's too small to lose money paying people to drive EVs and hybrids. Its risky solution (which is plucky, but has had mixed results) is to simply improve the internal combustion engine. It's achieved the best fleet average fuel economy in the U.S. already, using a range of direct-injection gas engines that are mostly naturally aspirated. A few tiny nods to electrification have been introduced, like i-eLoop regenerative braking and the Demio EV (a Japanese-market, last-generation Mazda2 with a 20kWh battery that was tested with a tiny rotary engine range extender). But the focus is on combustion, not electricity. And that focus isn't going away anytime soon. Mazda believes that pure gasoline, gasoline hybrid, and gasoline PHEV vehicles will remain the vast majority of vehicle sold through 2035. At that point, Mazda forecasts, BEV and fuel cell vehicles should make up about 15 percent of the total of Mazda's lineup. The remaining 85 percent will utilize some form of internal combustion engine. Now, that includes hybrids and even a small number of CNG/LPG cars. And these are global numbers, as well. There may be even fewer fuel cell and CNG/LPG vehicles sold here than abroad.

Toyota, Mazda partner to build EVs at new $1.6 billion U.S. plant

TOKYO — Toyota and Mazda plan to build a $1.6 billion U.S. assembly plant, the two said on Friday, as part of an alliance that will also see the Japanese automakers jointly develop electric vehicle technologies. The two will take small stakes in each other as part of the tie-up: Toyota, the world's second-largest automaker by vehicle sales last year, will take a 5 percent share of Mazda, extending its dominance in Japan's auto sector. Mazda will take a 0.25 percent share of its larger rival. The plant, something of a surprise at a time of overcapacity in the U.S. market, will be a boost to U.S. President Donald Trump, who campaigned on promises to increase manufacturing and expand employment for American autoworkers. The plant will be capable of producing 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people. It will start operating in 2021. The electric vehicles cooperation, meanwhile, comes as the tightening of global emissions regulations prompts more automakers to develop battery powered cars, as the industry struggles with hefty research costs and intense competition from technology companies over technology like self-driving cars. As part of the agreement, Toyota and Mazda will also work together to develop in-car information technologies and automated driving functions. Toyota, Japan's biggest auto company, has been forging alliances with smaller Japanese rivals for several years, effectively engineering a loose consolidation of the Japanese auto sector. It already owns a 16.5 percent stake in Subaru, Japan's No. 6 automaker, with which it also has a development partnership. Toyota is also courting compact car maker Suzuki to cooperate on R&D and parts supply as Toyota seeks to tap its smaller rival's expertise in emerging Asian markets. A stake in Mazda may also prevent future incursions by tech companies, one analyst said. "For a technology company which lacks the expertise in making cars, Mazda could look like a very interesting acquisition. They're very good, they're not too expensive. Maybe Toyota realizes this," CLSA managing director Chris Richter said. "By buying a 5 percent stake, Toyota takes Mazda off the table rather than having it sit out there like a free agent which could someday be used against them." COROLLA PRODUCTION SHIFT Mazda stands to gain from a deal that gives the small automaker a production foothold in the United States.

Honda sees sales up but profit sliding 16 percent in 2017-18

TOKYO - Honda forecasts a 16 percent fall in operating profit for the current financial year as the Japanese automaker sees higher auto sales being offset by a stronger yen and research-and-development costs. Japan's No. 3 automaker said it expects an operating profit of 705 billion yen ($6.34 billion) in the current FY2018, down from 840.7 billion yen posted in the fiscal year just ended, and lower than an average estimate of 850.8 billion yen from 23 analysts polled by Thomson Reuters I/B/E/S. It sees a 14 percent slide in net profit to 530.0 billion yen this year, down from 616.5. Honda's projections are based on a forecast that the yen will average 105 yen to the U.S. dollar through next March, stronger than the 108 yen rate in the year just ended.BUT CAR SALES ARE UP At the same time, there's good news as Honda expects its global vehicle sales to edge up 1 percent to 5.08 million this year, bolstered by growth in Asian sales to 2.06 million units, beating out North America to become Honda's top market as more Chinese drivers flock to its cars. The company expects to sell 1.92 million vehicles in North America, 2.5 percent less than the year just ended as it struggles to sell sedans including the Accord, which have fallen out of fashion in the past few years. Honda has been ramping up production of SUVs to keep up with strong demand for larger models in the United States, although overall vehicle sales show signs of slowing following a boom cycle after the global financial crisis. Mazda is taking a similar strategy, announcing on Friday it would expand production of SUV crossover models at home, while equipping overseas plants to enable more flexible production of models according to market needs. Japan's No. 5 automaker forecast a 19 percent jump in operating profit for the current financial year as it expects higher sales volumes, particularly in North America, to help it recover from last year's profit slump.A CONSERVATIVE OUTLOOK Executive Vice President Seiji Kuraishi acknowledged that Honda's expected currency hit of 95 billion yen was based on a "conservative" yen forecast, adding that growing costs to create next-generation cars would also impact earnings. "Our costs are rising to develop new technologies which will be needed in the future, like automated driving functions and electric cars," he told reporters at a results briefing.