Honda Accord Diesel and New Hybrid Coming for 2009 Model Year

At the Tokyo Auto Show, Honda confirmed that the 2009 US Accord will have an optional 2.2 liter diesel engine. Boost levels, and therefore output, have not yet been finalized, but it's expected to make at least 150 horsepower and 260 lb-ft. of torque, while likely eclipsing the fuel economy of both the old V6 Accord Hybrid and the current Toyota Camry Hybrid.

This will be an impressive engine for several reasons. Other than the respectable power and torque for a four cylinder and expected strong fuel efficiency (likely well over 40 miles per gallon in the real world), the engine will mark the debut of Honda's Clean Diesel technology in the US. The engine will be 50 state-legal (unlike many 2007 model year diesels), and unique to Honda, the engine will not require a urea injection as Mercedes and larger VW diesels to remove harmful NOx from the exhaust (Mercedes calls their diesels BlueTec, and the urea injection liquid, which must be periodically refilled at the dealer, is called AdBlue). Instead, Honda's solution is a NOx converter that - without adding any chemicals - produces its own ammonia through a chemical reaction that reacts with the NOx to produce harmless nitrogen and water.

Honda is also planning to begin sales of its new dedicated hybrid model, likely to compete directly with the popular Toyota Prius. The new Honda hybrid (which still does not have a name) will be a five passenger vehicle. This vehicle may be followed later by a smaller, sportier hybrid model similar to the Honda CR-Z concept (shown to the left) previously shown by Honda.

The best news about these new engines and vehicles is that Honda has directly addressed one of the biggest criticisms of hybrid and diesel vehicles: that is, diesels and hybrids typically save fuel, but the added complexity and components makes the vehicles too expensive to have any kind of economic benefit. Instead, Honda expects that the breakeven point (where fuel savings have equaled the additional price premium for a diesel or hybrid) will be two years for these new models. An earlier rumor on the Accord Diesel's pricing was that it would slot somewhere in the middle of the lineup, so it certainly seems plausible. If Honda keeps the pricing in that sweet spot, 2009 Accord Diesel sales should take off.

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OnStar Announces Stolen Vehicle Cutoff Device

In a move that can be construed as either very comforting or very disturbing, depending on one's perspective, GM and OnStar announced today that they will offer a new technology called Stolen Vehicle Slowdown in 1.7 million 2009 model year vehicles.

The system, which is included in the one-year OnStar subscription that customers receive when buying an eligible 2009 model year vehicle, is activated when a customer reports a stolen vehicle to law enforcement. The subscriber then can call OnStar and request Stolen Vehicle Location Assistance. As long as the subscriber has not opted out of Stolen Vehicle Location Assistance, OnStar will locate the vehicle using GPS technology and provide its information to law enforcement.

Once police officers have seen the stolen vehicle, they can ask OnStar to slow the vehicle remotely. OnStar can then send a remote signal to the vehicle to reduce engine power, gradually slowing the vehicle, and preventing a dangerous high speed police chase.

On one hand, since most stolen vehicles are not recovered intact - if at all - it's nice to know that your car will make itself much easier for police to find. It's also reassuring that a pretty foolproof way to prevent police chases - at least of GM vehicles - has been developed. Generally, those hurt most by police chases are innocent bystanders, the police officers doing the chase, or the owner of the stolen vehicle - because they rarely end without significant damage to the stolen vehicle.

However, I have a few problems with this, some of them fundamental to the way GM markets its OnStar service. More and more GM models are featuring OnStar as standard equipment - either across the entire model range, or standard on upper trim levels. For instance, it's impossible to buy a new 2008 Corvette without OnStar. Some people have a big problem giving a third party the theoretical ability to track their vehicle's location and speed and don't want the service. These individuals have three choices: buy a different vehicle, probably from one of GM's competitors; go through the effort of disabling OnStar and removing the hardware (this is not easy to do, and will probably become even more difficult for 2009 model year vehicles, otherwise thieves will just disable OnStar); or buying the vehicle anyway and just living with the idea of OnStar having the ability to know where you are and how fast you're going.

GM isn't making OnStar standard in more and more vehicles out of the goodness of its corporate heart; rather, it's almost entirely financial (with a small intangible advertising benefit). You see, for every vehicle that GM sells with OnStar, even if it's "standard," they increase the vehicle's price by a few hundred dollars. Not only does this raise average transaction prices for GM, but also makes it easier to convert some of those first year "free" OnStar subscribers to annual paying customers.

GM's obsession with OnStar and its recurring revenue streams often cause the company to make shortsighted decisions to "protect" OnStar. One example of this is the lack of factory available Bluetooth interoperability in the all-new 2008 Cadillac CTS. GM figured that allowing owners to use the car's electronics to connect to their cell phone could jeopardize the OnStar hands-free calling feature, so it wasn't planned for the US launch of the vehicle, while European CTS models - where OnStar is not available - did get Bluetooth. A customer and critical uproar over this decision led GM to backtrack and offer Bluetooth as a dealer-installed accessory instead.

Another example of GM's OnStar myopia is the lack of availability in several of its midsize sedans. None of the vehicles on the Epsilon platform - the Pontiac G6 (released for the 2005 model year), Saturn Aura (released for the 2007 model year), or Chevrolet Malibu (released for the 2008 model year) have satellite navigation available as even an option. Instead, GM is happy to point customers to its OnStar Turn-by-Turn navigation service, which - for additional charges on top of the basic OnStar subscription - will show monochrome arrows on the radio display and verbally give the driver instructions. For those who have grown used to a color LCD map display in your vehicle, it's not the same thing.

I hope for GM's sake that the new OnStar feature has plenty of safeguards built in to ensure that only vehicles legitimately reported stolen by their owners are disabled/stopped, and that it's not misued or abused by anyone. The bottom line is, in my opinion, OnStar is a nice feature for those who want it, and this new feature is a nice addition to its capabilities. However, I don't believe that OnStar should be standard in any vehicle, even in those at higher trim levels like Corvettes or Cadillacs.

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Maybach Hasn't Played Out As Expected

The recently renamed Daimler AG's ultra-expensive, ultra-luxurious division, Maybach, was launched with great fanfare in 2002 as a competitor to Rolls-Royce and Bentley. In the late 1990s, DaimlerChrysler decided to resurrect the prewar Maybach name for its new corporate flagships, the 57 and 62 (which refers to the length of the automobiles in decimeters).

Well, fast forward a few years, and the brand's cars have NOT been selling well in the US. The company sold 146 cars in 2006, 152 cars in 2005, 244 cars in 2004, 166 cars in 2003. So far in 2007, it has sold 80 cars through August 31, so that means that in the car's entire existence in the US, it has sold only 788 cars. It makes me feel even more "fortunate" to occasionally spot the one near where I work (I work near a wealthy area, but don't live in one), since I've been seeing it since 2003 or 2004. Contrasting these actual sales results were DaimlerChrysler's sales projections of 600 units per year. The dealer body was established based on the projection of 600 units annually, but Ernst Lieb, CEO of Mercedes-Benz USA said that 29 of the original 70 US dealers have given up their franchises. Daimler has negotiated compensation packages with the dealers, which - in at least one case - are about 25 cents on the dollar. That means that each dealer will get back about $125,000 of the approximate $500,000 upfront cost to set up a franchise.

So, what went wrong with the Maybach? They're certainly comfortable, with every imaginable luxury, including some unimaginable ones like an intercom system to allow vehicle occupants to speak with people outside of the car and rear seats in the 62 that can recline completely flat. The cars are powerful, with engines producing at least 550 horsepower. Well, my guess is that although people in the know can tell what a Maybach is, the cars have the misfortune of looking like unattractive Chinese knockoffs of Mercedes S-class sedans. When the Maybach made its debut, it looked more unique relative to the S-class, but with the introduction of the current W221 S-class sedan, it adopted some of the Maybach 57's more attractive styling features and is overall a much nicer looking automobile, and can be purchased for less than half the price of a Maybach.

Meanwhile, the guy who bought a Rolls-Royce Phantom (and there were 336 sold in 2006 and 382 sold in 2005 in the US - more than double the Maybach's sales), for better or worse, never sees himself, or a facsimile of himself, anywhere else in the automotive world.

Frankly, I'm surprised that Mercedes-Benz has bothered to keep pushing the Maybach line. Extremely low sales volumes probably don't make the car a profitable venture, and the fact that they continue to soldier on with the Maybach brand probably is some combination of German arrogance (the Volkswagen Phaeton is an excellent case study of that trait) and a lack of understanding of sunk costs ("we can't abandon Maybach after all of the money we've spent on it.")

Regardless of the reason, if I had more money than I knew what to do with, I would not be spending it on a Maybach. I'd probably go for a $186,000 S65 AMG (with basically the same engine that the Maybach has, wrapped in a more attractive body shell and what is still a really nice interior, and perhaps a Ferrari F430 - or even a $75,000 Corvette Z06 - as a sporty second car with the savings.

If I were Dieter Zetsche, I'd drop Maybach as a standalone brand, reach financial settlements with my remaining dealers, and introduce an ultra-luxurious derivative of the S-class and CL-class Mercedes-Benz cars called "Maybach" that captured the essence of the brand (high performance, ultimate luxury, and owner customization) without the need to support an extra brand.

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Ethanol Boom Slowing Down

Ethanol has often been in the news for the past year or two as a much-hyped alternative to gasoline for fueling our motor vehicle fleet. Ethanol's supporters point out that E85 fuel (85% ethanol/15% gasoline) reduces US dependence on imported petroleum, burns more cleanly, and can actually increase vehicle performance. Opponents of ethanol point out that production - which comes mostly from corn in the US - takes food from the global food supply, requires almost as much energy to produce as the finished product provides, and reduces fuel economy. Also, only a small percentage of the service stations in the US have E85 pumps, making it difficult to find in most regions even for folks interested in using the fuel in their flex fuel-capable vehicle. For more information on the E85 experience in daily life, refer to The E85 Road Test, published here in June 2007.

Along with a big marketing push from GM and the US government in support of E85, in many parts of the country, ethanol was blended with gasoline to create E10 (10% ethanol/90% gasoline) as a clean air alternative to the old gasoline/MTBE blend that was found to contaminate ground water and outlawed in the past year. Excitement and hype about corn-based ethanol compelled US farmers to plant more acres of corn for the 2007 growing season than at any time since World War II. And, why wouldn't they? Corn prices are through the roof, and it can be a very profitable crop at current prices.

Until yesterday, when the Wall Street Journal wrote about falling ethanol prices, I had no idea that ethanol prices had dropped so much. They are down over 30% over the past few weeks alone. While availability of the fuel continues to be a problem, the low price certainly makes it an even more compelling alternative to gasoline. Heck, as long as ethanol was, say, less than $2 per gallon, and regular gas is over $2.50, it's almost cheaper to use than gasoline (considering the approximate 25% fuel economy penalty that ethanol has compared to gasoline). According to the article, the price of ethanol has dropped to about $1.50 per gallon, from over $2.50 per gallon a year ago.

I'd certainly use it, and the energy security (i.e. no imported oil) aspects of E85 make it even more appealing. For the equation to calculate the breakeven price of using E85, refer to the link above for the E85 Road Test article.

My guess is this is just a supply and demand imbalance. When ethanol was added to most gasoline instead of MTBE, plus all the hype and hoopla over E85 from GM and others, everyone wanted a piece of the action. Now that things are coming back down to earth, all the farmers who planted record amounts of corn, and all the refineries who went online in an attempt to capture the boom, have created more supply than there is demand for, at least in the current environment.

If you drive a flex fuel-capable vehicle, and you're interested in saving money on your fuel bill, you might want to check out http://www.e85refueling.com/ to see if there is an E85 station near you. Happy motoring!

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