Aspiring For No.2

Denso Corp. aims to double its penetration in the global market for common-rail diesel injection from its current 15%, surpassing everyone but pioneer Robert Bosch GmbH.

Manufacturing is at capacity now, at 1.7 million units annually from two plants in Japan, one in Thailand and one in Szekesfehervar, Hungary. A fifth common-rail plant is to be added next year in Japan, and all existing plants have expansion plans to meet booked growth through 2008.

New business starting this year with Ford Motor Co. will boost production to more than 2 million systems in fiscal 2006. The systems will go into production in October at Denso Mfg. Hungary, about an hour's drive from Budapest.

Ford is Denso's first non-Japanese customer for common rail. Max Nakagawa, head of Denso's Aachen Engineering Center for diesel engines in Germany, says Denso's success equipping diesels for the Mazda6 in Europe helped swing the deal with Ford, which holds a controlling interest in Mazda Motor Corp.

Toyota Motor Corp., Denso's stockholder of reference, accounts for 30% to 40% of Denso's common-rail business now.

Denso executives say diesel's share will continue to grow slowly in Europe, to perhaps 60% of the market from 50%; quickly in Asia, especially for the Thailand-built pickup trucks; not at all in Japan and perhaps some in North America.

“Japanese drivers don't have a chance to know the benefits of diesel,” says Masahiko Miyaki, Denso managing officer-gasoline and diesel fuel-injection products, referring to the driving style in Japan.

Urban life and traffic jams favor hybrids that consume no energy when at a standstill, he says. The powerful torque and long life of diesel engines offer few benefits in Japan. But they do in Europe, where speed limits are high and tax policies often favor diesel.

Asia's potential is mainly the 1-ton pickups that Ford-Mazda, Toyota, Nissan Motor Co. Ltd. and others build in Thailand.

The tossup market is North America, where long-distance driving would seem to favor diesels. However, diesels are unpopular politically in the U.S. and must compete with hybrid-electric vehicles, which are gaining popularity.