Why Honda is so obsessive over fuel economy *interview*
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Why Honda is so obsessive over fuel economy *interview*
Honda is so obsessive about having the best gas mileage on the road that Charlie Baker, its U.S. chief engineer, once crawled underneath a BMW at a car show to gather some competitive intel. Baker wanted to make sure the SUV he was developing, the Acura MDX from Honda's luxury division, would top BMW's X5, so he was snapping photos of the Beemer's underbelly to size up its aerodynamics. A BMW exec tugged on his leg, asking, "Can I help you, sir?'' Baker's response: "Not unless you have a jack.''
Despite the megawatt buzz about the Toyota Prius, Honda actually tops the charts for fuel economy among auto-makers in America. Of the 10 best gas misers on the road today, Honda has seven of them, according to the EPA. Honda also offers more hybrid models—three—than anyone else (though Toyota will soon catch up). Honda has always made leading in fuel economy a bedrock principal, even when American car buyers could not care less. But with gas and oil prices remaining stubbornly high, drivers are caring more, and their interest in mileage extends beyond what's parked in their driveway. Improving fuel economy is seen by many as a necessary step in reducing America's dependence on foreign oil and advancing a "green'' agenda for the environment.
Baker had to learn the hard way how important fuel economy is to Honda. When he was engineering the MDX, the former GM engineer tried to convince his new bosses that Americans didn't care about gas mileage. He was sent back to the drawing board with a simple instruction: "Make it greener.'' That's how he ended up under that BMW. His spying paid off. The MDX gets 23 miles per gallon; the X5 gets 21.
Now that Honda's mileage mantra is looking smart, NEWSWEEK's Keith Naughton sat down with Baker to discuss what drives the automaker to go for the green:
Naughton: Honda worried about gas mileage when gas mileage wasn't cool. Why?
Baker: Everyone at Honda views being in a company as being far more than just turning a profit. It's not that we're poor businessmen, but I think everybody at Honda is fired by the dream of creating great products that are the most efficient in their class.
How difficult was it to keep that principle in the '90s when the SUV boom was in full swing and gas prices were at record lows?
Well, it certainly caused us pain. For a long time our president was strongly against getting into the truck market because he could not see how it was consistent with Honda values. But after a long time of wrestling with it, we said, "There are other people who are developing these trucks with horrendous fuel economy and we can do better."
How did your rivals react when the MDX debuted in 2000?
We were criticized for being late to the party. People repeatedly told us we were going to fail.
How difficult was it to engineer the MDX to meet Honda's stringent mileage standards?
I'll never forget it. I was a rookie leading this MDX team. We'd done the research and we had an efficient package. But when we pitched our business plan to the board of directors, Mr. [Koichi] Amemiya, who was in charge of North America, his No. 1 comment was: "It should be more green." I made the mistake of saying, "But sir, nobody cares about the green issues." And he just smiled and said "I know."
But I'm sure your research showed that gas mileage was a very low priority to car buyers.
It certainly was, but I am absolutely ashamed of ever making that remark. Feel free not to include it in the interview.
Does your research now show that people care about gas mileage?
If you are talking about large SUVs, yes, they are giving some lip service to fuel economy. But that is sort of a "here today, gone tomorrow"-type phenomenon. The point is not that customers demand it or don't demand it, because that's absolutely not the viewpoint of Honda. When you are a philosophy-driven company, you don't ask the customer if they agree with your philosophy.
Is America's taste in cars changing to greener vehicles, or will we eventually default to our bigger-is-better comfort zone?
The car-buying public is changing.
Has the SUV boom peaked?
The market is starting to change. It's not going to stay with the traditional SUV. Already you see that with the growth of CUVs, crossover utility vehicles, which just encompasses a huge variety of concepts.
Toyota and Nissan have large SUVs to compete with Detroit's big boys. Could Honda ever bring itself to develop a hulking SUV?
We don't get the Hummer, we just don't get it. There would not be a lot of motivation within Honda to develop the Hummer. We would be saying we could make it lighter, we can make it have better fuel economy. But in the end, it's certainly not a Hummer. It's closer to a Pilot. So we're at cross-purposes with a vehicle like a Hummer.
Would Honda ever build a full-size pickup truck?
We studied traditional pickup trucks till we were blue in the face. And we said, "Why would we be the sixth manufacturer to do the same concept of a pickup as Ford, GM and Chrysler? Let's think about it in a different way. Let's make a Honda pickup. Let's surprise people with things like a trunk in the bed and great fuel economy. Let's create a pickup the customer can't even imagine." And we think that's what we've done with the Ridgeline.
Toyota talks about every car being a hybrid someday. What do you think is going to be on our highways in 10 and 20 years?
We would love to make 100 percent hybrids. Obviously, there are huge challenges, but it would be a perfect embodiment of the Honda philosophy. In the longer term, you want to move to a carbon-free type of mobility. So we are determined to lead in fuel cells.
But developing an affordable electric-fuel-cell car seems ever elusive. Will we ever get there or are we trying to crack the wrong nut?
We've got fuel cells on the road right now. At Honda that's the equivalent of the moon shot. We absolutely pick that as a challenge. Can we guarantee there will be 32 percent of Hondas that will have fuel cells by 2013? No. But there is a huge commitment to fuel cells.
As you develop future vehicles, what are your assumptions about gas prices?
We don't really care. Why would we?
Well, because it could have an effect on consumers' choices.
We don't spend a lot of time agonizing about fuel consumption. The answer is already clear. You are going to have the best fuel economy in class of any vehicle. Period. Have a nice day. You don't need to do any market research. You don't need to do any fancy negotiations because you are never going to get anything approved by the board of directors without proving you have the best fuel economy in class. That's it.
Honda leads the car business in fuel economy, but not in perception. Why is Toyota viewed as the greenest automaker?
That's very frustrating for us. Honda's head and shoulders the greenest company, yet other companies with less accomplishments are able to capitalize because they've got a better PR machine.
Maybe it's just hard to get respect for something as sensible as gas mileage. Even with gas at $2 a gallon, people still don't buy a car simply for good fuel economy, right?
Exactly right. What we've got is the stealth approach. We're not trying to say buy this car—yeah, it's ugly, yeah, it really doesn't have the features that you want, yeah, maybe it's a little too expensive, but buy it anyway because it's the right thing to do. Because No. 1, you would go out of business. We have to make an attractive car and then one day you'll wake up and say, "Hey, this thing gets pretty good fuel economy." And you'll feel good about it.
http://www.msnbc.msn.com/id/8272373/site/newsweek/
Despite the megawatt buzz about the Toyota Prius, Honda actually tops the charts for fuel economy among auto-makers in America. Of the 10 best gas misers on the road today, Honda has seven of them, according to the EPA. Honda also offers more hybrid models—three—than anyone else (though Toyota will soon catch up). Honda has always made leading in fuel economy a bedrock principal, even when American car buyers could not care less. But with gas and oil prices remaining stubbornly high, drivers are caring more, and their interest in mileage extends beyond what's parked in their driveway. Improving fuel economy is seen by many as a necessary step in reducing America's dependence on foreign oil and advancing a "green'' agenda for the environment.
Baker had to learn the hard way how important fuel economy is to Honda. When he was engineering the MDX, the former GM engineer tried to convince his new bosses that Americans didn't care about gas mileage. He was sent back to the drawing board with a simple instruction: "Make it greener.'' That's how he ended up under that BMW. His spying paid off. The MDX gets 23 miles per gallon; the X5 gets 21.
Now that Honda's mileage mantra is looking smart, NEWSWEEK's Keith Naughton sat down with Baker to discuss what drives the automaker to go for the green:
Naughton: Honda worried about gas mileage when gas mileage wasn't cool. Why?
Baker: Everyone at Honda views being in a company as being far more than just turning a profit. It's not that we're poor businessmen, but I think everybody at Honda is fired by the dream of creating great products that are the most efficient in their class.
How difficult was it to keep that principle in the '90s when the SUV boom was in full swing and gas prices were at record lows?
Well, it certainly caused us pain. For a long time our president was strongly against getting into the truck market because he could not see how it was consistent with Honda values. But after a long time of wrestling with it, we said, "There are other people who are developing these trucks with horrendous fuel economy and we can do better."
How did your rivals react when the MDX debuted in 2000?
We were criticized for being late to the party. People repeatedly told us we were going to fail.
How difficult was it to engineer the MDX to meet Honda's stringent mileage standards?
I'll never forget it. I was a rookie leading this MDX team. We'd done the research and we had an efficient package. But when we pitched our business plan to the board of directors, Mr. [Koichi] Amemiya, who was in charge of North America, his No. 1 comment was: "It should be more green." I made the mistake of saying, "But sir, nobody cares about the green issues." And he just smiled and said "I know."
But I'm sure your research showed that gas mileage was a very low priority to car buyers.
It certainly was, but I am absolutely ashamed of ever making that remark. Feel free not to include it in the interview.
Does your research now show that people care about gas mileage?
If you are talking about large SUVs, yes, they are giving some lip service to fuel economy. But that is sort of a "here today, gone tomorrow"-type phenomenon. The point is not that customers demand it or don't demand it, because that's absolutely not the viewpoint of Honda. When you are a philosophy-driven company, you don't ask the customer if they agree with your philosophy.
Is America's taste in cars changing to greener vehicles, or will we eventually default to our bigger-is-better comfort zone?
The car-buying public is changing.
Has the SUV boom peaked?
The market is starting to change. It's not going to stay with the traditional SUV. Already you see that with the growth of CUVs, crossover utility vehicles, which just encompasses a huge variety of concepts.
Toyota and Nissan have large SUVs to compete with Detroit's big boys. Could Honda ever bring itself to develop a hulking SUV?
We don't get the Hummer, we just don't get it. There would not be a lot of motivation within Honda to develop the Hummer. We would be saying we could make it lighter, we can make it have better fuel economy. But in the end, it's certainly not a Hummer. It's closer to a Pilot. So we're at cross-purposes with a vehicle like a Hummer.
Would Honda ever build a full-size pickup truck?
We studied traditional pickup trucks till we were blue in the face. And we said, "Why would we be the sixth manufacturer to do the same concept of a pickup as Ford, GM and Chrysler? Let's think about it in a different way. Let's make a Honda pickup. Let's surprise people with things like a trunk in the bed and great fuel economy. Let's create a pickup the customer can't even imagine." And we think that's what we've done with the Ridgeline.
Toyota talks about every car being a hybrid someday. What do you think is going to be on our highways in 10 and 20 years?
We would love to make 100 percent hybrids. Obviously, there are huge challenges, but it would be a perfect embodiment of the Honda philosophy. In the longer term, you want to move to a carbon-free type of mobility. So we are determined to lead in fuel cells.
But developing an affordable electric-fuel-cell car seems ever elusive. Will we ever get there or are we trying to crack the wrong nut?
We've got fuel cells on the road right now. At Honda that's the equivalent of the moon shot. We absolutely pick that as a challenge. Can we guarantee there will be 32 percent of Hondas that will have fuel cells by 2013? No. But there is a huge commitment to fuel cells.
As you develop future vehicles, what are your assumptions about gas prices?
We don't really care. Why would we?
Well, because it could have an effect on consumers' choices.
We don't spend a lot of time agonizing about fuel consumption. The answer is already clear. You are going to have the best fuel economy in class of any vehicle. Period. Have a nice day. You don't need to do any market research. You don't need to do any fancy negotiations because you are never going to get anything approved by the board of directors without proving you have the best fuel economy in class. That's it.
Honda leads the car business in fuel economy, but not in perception. Why is Toyota viewed as the greenest automaker?
That's very frustrating for us. Honda's head and shoulders the greenest company, yet other companies with less accomplishments are able to capitalize because they've got a better PR machine.
Maybe it's just hard to get respect for something as sensible as gas mileage. Even with gas at $2 a gallon, people still don't buy a car simply for good fuel economy, right?
Exactly right. What we've got is the stealth approach. We're not trying to say buy this car—yeah, it's ugly, yeah, it really doesn't have the features that you want, yeah, maybe it's a little too expensive, but buy it anyway because it's the right thing to do. Because No. 1, you would go out of business. We have to make an attractive car and then one day you'll wake up and say, "Hey, this thing gets pretty good fuel economy." And you'll feel good about it.
http://www.msnbc.msn.com/id/8272373/site/newsweek/
Last edited by cambo; Jun 26, 2005 at 12:13 AM.
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Rep Power: 339 good to have that passion.... as long as they dont stop making high revving 100HP/Liter engines.
I dont know about other ppl on here, but I bought the vic for fuel economy!
I dont know about other ppl on here, but I bought the vic for fuel economy!
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That has always been one of their goals. That is one of the main reasons that they STILL don't have a V8.
I give them a lot of props, and hopefully, I'll be working with them someday.
I give them a lot of props, and hopefully, I'll be working with them someday.
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Rep Power: 337 if they ever come out with a v8 itll blow all other v8s away. if they can make 4bangers and v6s that make more power than any other engine, then i can't wait to see what they can do with 8 cylinders. if they really wanted they could make a small displacement v8. heres to hopin. :-)
4 cyclinders down, 4 to go.....
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Originally Posted by MajinB
if they ever come out with a v8 itll blow all other v8s away. if they can make 4bangers and v6s that make more power than any other engine, then i can't wait to see what they can do with 8 cylinders. if they really wanted they could make a small displacement v8. heres to hopin. :-)
Nothing works better than a Chris except a Honda.
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Rep Power: 347 That is what everyone wants Honda to do. But that will take a while before they even consider that. The market outside of the US for performance V8's or any kind of V8 is very small. With the gas crunch and prices like they are, I'm fairly sure Honda isn't thinking about a V8 anytime soon.
I see a couple of vehicles it would be excellent in, like the Pilot, Ridgeline, the RL and the next gen NSX. The only catch is though that those vehicles sales all together are probably not worth the developmental costs of a new V8. Also, I'm pretty sure the Pilot and Ridgeline aren't even available in most other markets.
If I know Honda though, they could get more power then most Hemi's (or DCX products marketed as such) and still get better gas-mileage if they ever did make a V8. Yes, I would like to see one also, just so that others won't say Honda doesn't have *****.
I see a couple of vehicles it would be excellent in, like the Pilot, Ridgeline, the RL and the next gen NSX. The only catch is though that those vehicles sales all together are probably not worth the developmental costs of a new V8. Also, I'm pretty sure the Pilot and Ridgeline aren't even available in most other markets.
If I know Honda though, they could get more power then most Hemi's (or DCX products marketed as such) and still get better gas-mileage if they ever did make a V8. Yes, I would like to see one also, just so that others won't say Honda doesn't have *****.
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Rep Power: 337 agreed, everyone i see in an suv almost wishes they weren't cause of gas prices,lol. i had a guy ask if he could have my car and trade me his lexus 300 cause his mileage was so bad. when i told him 40mpg he did a double take and asked if it was a hybrid. i told him 4banger stick. great stuff. thats why i love honda. its the philosophy of the car.
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From: Puerto Rico
Rep Power: 335 Very interesting report.
I bought a Civic because it gave the mpg I needed and wanted in a nice body, for a good price. Wanted the Civic Hybrid... but it's not cheap down here in Puerto Rico. The HX with CVT isn't imported. Didn't want a Toyota... sooo... there went the EM211 (coupe... and do please correct me if I have this number wrong).
I still want the hybrid, but that'll come on in the future.
And about the V8's... Honda doesn't really need the V8! Just look at what the V6's give out!
Great article! Keep these comin'!
I bought a Civic because it gave the mpg I needed and wanted in a nice body, for a good price. Wanted the Civic Hybrid... but it's not cheap down here in Puerto Rico. The HX with CVT isn't imported. Didn't want a Toyota... sooo... there went the EM211 (coupe... and do please correct me if I have this number wrong).
I still want the hybrid, but that'll come on in the future.
And about the V8's... Honda doesn't really need the V8! Just look at what the V6's give out!
Great article! Keep these comin'!
Last edited by ramcosca; Jun 27, 2005 at 12:20 AM.
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Originally Posted by CivicsRdBest
That is what everyone wants Honda to do. But that will take a while before they even consider that. The market outside of the US for performance V8's or any kind of V8 is very small. With the gas crunch and prices like they are, I'm fairly sure Honda isn't thinking about a V8 anytime soon.
I see a couple of vehicles it would be excellent in, like the Pilot, Ridgeline, the RL and the next gen NSX. The only catch is though that those vehicles sales all together are probably not worth the developmental costs of a new V8. Also, I'm pretty sure the Pilot and Ridgeline aren't even available in most other markets.
If I know Honda though, they could get more power then most Hemi's (or DCX products marketed as such) and still get better gas-mileage if they ever did make a V8. Yes, I would like to see one also, just so that others won't say Honda doesn't have *****.
I see a couple of vehicles it would be excellent in, like the Pilot, Ridgeline, the RL and the next gen NSX. The only catch is though that those vehicles sales all together are probably not worth the developmental costs of a new V8. Also, I'm pretty sure the Pilot and Ridgeline aren't even available in most other markets.
If I know Honda though, they could get more power then most Hemi's (or DCX products marketed as such) and still get better gas-mileage if they ever did make a V8. Yes, I would like to see one also, just so that others won't say Honda doesn't have *****.
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