Here We Go As a Result of Lowering Gasoline Costs-Honda Rethinks Diesels for U.S.

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Washington DC December 11, 2008; The AIADA newsletter reported that Honda Motor is reconsidering its decision to launching diesel-power vehicles next year in the United States, where diesel fuel has become much more expensive than gasoline.

"Right now we are re-evaluating, due to trends in gasoline and diesel prices, and the price of raw materials we use in the exhaust clean-up system," Honda spokesman David Iida said.

Honda's move appears to be solo. But Honda's considered a savvy player in the U.S. market, so others might be tempted to rethink U.S. diesels. The Detroit Free Press reports that Honda has been promising a four-cylinder diesel next year from its Acura luxury brand.

Diesel cars typically retail for at least $1,500 more than similar gasoline models, but they get 20 to 40 percent better mileage. The average price of diesel fuel, though, is running 40 to 50 percent more than average gasoline prices, according to data from the Oil Price Information Service. That wipes out cost savings from the diesel's improved mileage.