By on October 20, 2010

When someone tells you “you’ll save a lot of money,” always ask: “How much will it cost me?” New technology that saves you a lot of money usually comes with a nasty habit: It costs a lot upfront. With a car, you are faced with the dilemma whether to pay Big Car now or Big Oil later. I never forget when I was a young copywriter and I had the task of launching the first diesel powered Golf. I extolled its prudence at the pump and its longevity. Whereupon a grizzled old guy at the advertising department of Volkswagen said: “That thing is expensive. You need to drive 80,000 km to get your money back. By that time, the engine will fall out of the car.” (VW had some corrosion issues back when.) That introspection was triggered by two events: Ed is in Michigan, he has a date with the Volt. His mission: Find out when you will get your money back. Then there’s Mazda, which did something utterly boring, but likewise highly exciting.

Mazda announced today that it has improved the fuel efficiency of its Demio subcompact to 30km per liter, on par with that of hybrid vehicles, and that they will will release the new car in Japan next year. That according to The Nikkei [sub], which also tells us that “the gas mileage will be the best among conventional cars available in Japan, surpassing the previous record of 26km per liter achieved by Daihatsu’s Mira minivehicle and Nissan’s March subcompact.”

What’s much more interesting: The conventional, ICE powered Demio is just a tad less efficient than Toyota’s Prius, which gets 38km per liter. And it’s right up there with Honda’s Fit hybrid, which also gets 30km per liter. (All numbers Japanese standard, non-EPA. Converted via math alone, 30 km per liter would be 70 mpg.)

At the heart of what Mazda calls “SKYACTIV” technology is a direct injection pump gas engine that that gets its improved fuel efficiency out of a frighteningly high compression ratio of 14:1 . I hear you knockin’? No, you won’t.

No price has been named for the car (better known as the Mazda2 outside of Japan,) but a good guess is it won’t cost more than a comparable, ICE powered car. Don’t expect complicated ROI calculations from me. (I won’t step into a previous quagmire.) But one thing is clear: If you can get the mileage of a hybrid at ICE prices, you’ve got yourself a winner. Especially in the booming emerging markets, where cars are paid with cash, and where people are more concerned with upfront cost (and also often are better schooled in math.) And maybe they have the inside track on China’s insidious Rare Earth caper.

While on the topic of Mazda, their Prez. Takashi Yamanouchi said at the sidelines of the presentation that he’s not considering tying up with other automakers, and that “we have agreed with Ford to continue our strategic partnership.” Listen carefully: When it’s down to “strategic partnership,” then it’s down to nothing. A strategic partnership is a business relationship at best, usually, it’s a lot of fluff.

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35 Comments on “Payback Is A Bitch: Mazda’s ICE Challenges Hybrids...”

  • avatar

    At that compression ratio I think CNG might also work, further reducing CO2 emissions. Maybe not by direct injection, but still.
    I guess howm much reduction will be available when the OPOC engine finally breaks cover and gets its way into mainstream market.
    I still don’t see the case for hybrids like the Prius. The Volt system makes a bit more sense, if what MT published is true, since the electric mode can go into practical commuting speeds and for longer distances. In any case it is too much complication.

    • 0 avatar

      How does the Volt make more sense?  It saves money where you don’t spend much money.  If you are commuting <40 miles per day, you are spending <$5/day in fuel in a midsize 4cyl sedan.  Most people are spending nearly that much on their sat TV subscriptions.  Stop drinking Starbucks and you’ll save the same amount of money without buying a $41k, err $33k car. 

      My personal calculations* show a 23 year payback for a Volt over buying a Prius V (the most expensive trim).  And the Prius can seat 5 if needed. 

      To see if a hybrid makes sense to you, you have to actually sit down and figure out where you spend most of your money driving.  If you commute 80 miles a day, with a free charging station at work, you work 350 days/year, and you rarely take a trip over 40 miles each way, the Volt would probably make financial sense.  Even then, you are still looking at a 6 year payback over a $27k Prius!!!  The fact is that buying a more expensive car over a less expensive car to save money just doesn’t make sense in a world of $3/gallon gas.

      * This is based on my 12 mile round trip commute, taking 200+ mile trips every 3rd weekend, a couple 70 mile roundtrips every month (trips to the closest mall/shopping center), and $0.06/kilowatt hr — WV’s electricity rates.

    • 0 avatar


      If you don’t see the case for the Prius, then there is no way Ed will come back with any good news from Michigan.
      The extra Volt cost must put it even farther down the road of return for the spend. In the case of the Mazda, I am glad they are doing something.  Their efforts to build fun, efficient cars with heavy emphasis on weight loss/control. is key.

      The one thing I notice with my 09 6S…fun and light.  But you can tell the difference between the Mazda philosophy and that of say VW. My daughter’s Tiguan rides several times more solid, but the 6 handles like it is a light weight fighter.

      This as in the 2 above allows for Mazda to make the case for more fun cars.
      As a lover of performance and cornering, Mazda has me.

    • 0 avatar

      Let me give some context to both of you.
      Firstly, I don’t know what a Starbucks coffee is, because AFAIK, we don’t have such franchise here.
      Secondly, in terms of fuel costs, a gallon of petrol here is US$ 0.14, diesel is half that. And CNG is FREE.
      From a technical standpoint, and with the very few knowledge I have of both cars, the Volt makes more sense than the Prius. I considered my daily commute which is 120 highway kms, and the posted here and everywhere in the interwebZ range of Volt, Leaf and Prius, and the 2 cars that make sense to replace a standard petrol car of those 3 are Volt and Leaf. I made the MPG math with a Panda diesel 2 years ago, and a diesel would be better.
      That said, with our current gas prices, it makes more sense to me to buy the biggest V8 I can find and drive like a total a$$hole. If gas prices rise, I can still put CNG and continue the party.
      On the economic math, sure, the Toyota and even the Nissan will be better than the Chevy.
      And it’s refreshing that new ideas of hybrid are out there. Maybe the myth that the HSD is the only practical/viable/etc hybrid will be debunked for good.

    • 0 avatar

      Quentin… Where do you live?
      You have an extremely short commute, but drive on 200+ mile trips 17 times a year and make 70 mile trips a few times a month to the closest shopping center?
      I drive about 22 miles one way to work.  Every other shop that I need is within 5 miles of my house.  I think that my driving habits would be far more common than yours.  In that case, I would be saving where I drive the most, to and from work.  But, you should also look at what it would cost to compare a Prius to a Corolla, Civic, Cruze, Focus etc.  Compared to those, the Prius and Volt don’t make sense.  Just do the math on a 40mpg highway Cruze eco.  How long would it take to recoup the cost of the Prius after that?  You would be surprised when you start doing the numbers.

    • 0 avatar

      Stephen – I live in rural WV.  My parents live 220 miles away, which I visit approximately once/month.  80k population cities are around 30~35 miles away, so I travel there every few weeks for entertainment.  My wife and I go to concerts or visit friends in Columbus, Cincy, or Pittsburgh (150+ miles away) a few times a year, too.  I usually do about 18k miles/year.  Regardless, I popped in “ideal” conditions, that pretty much no one will have, for the Volt and it still had a 6 year payback over a Prius.  As far as comparing to a Civic, Cruze, etc to a Prius, you missed where I said “The fact is that buying a more expensive car over a less expensive car to save money just doesn’t make sense in a world of $3/gallon gas.”  I completely agree that you don’t save money by buying a more expensive car up front to save a marginal amount of fuel down the road.  I’m an engineer.  Excel is practically open on my computers 24/7.  Everything I do at work has to have a cost, quality, or safety justification and that is simply part of my mentality now.  Unless your goal is to use the absolute least amount of fuel, a Volt makes no sense.  According to the Autoblog first drive, the interior is quite a letdown for a $33k vehicle, too.  And it weighs 3700 lbs!!!  So much for being fun.

      Stingray – The volt is essentially a parallel hybrid with a really big battery and 2 electric motors instead of 1.  It basically took HSD and changed the envelope of operation for the electric motors and gas engine.  Less revolutionary and more evolutionary.  The killer is that you have to pay for both a traditional powertrain and a stack of batteries.  With gas where it is in most of the world, it doesn’t make sense yet.

  • avatar

    Although this is the first I’ve heard that the D.I. engine will have a 14:1 compression ratio, there are other tweeks as well.
    Yamanouchi stated at a Russian car show in the summer that the new cars will feature start/stop technology and regenerative braking.  He also mentioned a new Sky-whatever automatic trans-axle – which I hope doesn’t mean CVT.  I believe he was referring to the replacement to the Mazda Tribute – the CX5.

  • avatar

    WRT to hybrids, payback, etc.  If one were to make a care almost entirely out of aluminum would that be more or less expensive than a hybrid and would the weight savings lead to fuel savings comparable to what one would achieve with a hybrid?

    • 0 avatar

      Fuel economy would not increase dramatically from a weight savings of a few hundred pounds. Look at GM–they’re ADDING a few hundred pounds to their cars with no obvious fuel economy hit.

    • 0 avatar

      Actually, there was a study published recently that did show significant increases in fuel economy could result from a modest investment in weight reduction.  Saw it on TTAC or Autoblog, maybe both.  Yes, we are seeing heavier vehicles getting improved mileage, but that’s due to improved drivetrain technology.  Put the same tech in lighter vehicles and you’ll see better mileage, it’s Physics 101.

    • 0 avatar

      On a related note, I’d be interested in knowing how much of any given hybrid’s fuel efficiency is attributable to factors other than the hybrid drivetrain (in which I’ll including regenerative braking, which I think doesn’t apply in a non-hybrid setting).  For instance, altered aerodynamics and different tires.  And likewise, what’s the real price penalty, as many hybrid versions have stripped down other features.

      Stated differently, if you took two otherwise identical cars (say, two Camrys) and plunked a hybrid drivetrain into one, how much more would it cost and how much better would the gas mileage be.  I bet the hybrid version doesn’t look like nearly as good a deal in that context.

    • 0 avatar

      The Camry hybrid doesn’t make a lot of concessions to fuel economy: the tires are more or less the same, and the aero tweaks aren’t significant.  And despite weighing more, the Camry gets better highway mileage and much better city mileage.  it’s faster, too.
      Hybrid powertrains really aren’t that complex or expensive.   The price premium is about the same as you’d pay for diesel—sometimes a little less, sometimes a little more—and the cars themselves are some of the most reliable on the road.

    • 0 avatar

      I guess it’s not a big surprise that using electric motors is a more reliable means of propelling a car from stoplight to stoplight than a gasoline engine.

  • avatar

    I wonder if this new Demio has any aerodynamic tweaks to it to increase fuel efficiency even more, or if SKYACTIV is just about the engine. I’m no Tatra engineer, but more streamlined wheels, close-able intakes, and low rolling resistance tires usually add even more km to the gallon; and we’re not talking ridiculously expensive mods.

  • avatar

    I have yet to get o ut and test drive this little car.
    I like the idea of lighter cars. To me this is the trick to fun cornering. Maybe not 5 hours highway cruises, but that is what my MKS is for.
    I keep hearing people say the Fiesta is better, and faster.
    Well, if they consider the Fiesta a faster car, I give up.
    I drove it and am sorry, but the Fiesta is NO performer.
    I felt it noisy, no room, wind noise was hard to hear with all the other noises going on.
    The transmission was always shifting trying to help the struggling engine.

    I HOPE the 2 is more fun to drive than the Fiesta.

  • avatar

    The biggest problem battery powered/assisted cars have to overcome is the probability that economy of scale will not reduce the price of the batteries. That’s the big flaw in many companies business plans around battery vehicles. There’s a good article in the WSJ on the subject:

  • avatar

    I still don’t see the “Ed is in Michigan” post in the blog timeline. The link to it works, but going back thru pages there’s no trace of the Ask B&B Whattaya wanna know about the Volt?

  • avatar
    Educator(of teachers)Dan

    Good for Mazda.  The compression ratio doesn’t frighten me either, I’ve heard that DI would bring the possibility of diesel type compression ratios to gas engines.
    @Trailer Trash; by virtue of its lighter weight, I hope the Mazda would be more fun in corners than the Fiesta.

  • avatar

    Does it have idle-stop, or is that an extra cost option?

  • avatar

    This is the case with any so-called fuel saving technology.
    Hybrids are a rip off…it will take you 13 years to pay off the $8,000 price increase of the Fusion Hybrid over a regular $20K Fusion.
    It will take you 23 years to pay off the Ecoboost premium in the Flex over a Tahoe with a proper V8 and proper 4WD.
    Diesel is the best at around 6-7 years over it’s ICE counterpart.

    • 0 avatar

      Hybrids are for people who feel better about the gasoline they consume. For them the added cost equals piece of mind. It equals funding new technology that might lead to even more efficient vehicles. For them it is not equal to the cheapest way to commute to work or take the kids to school.
      My feelings are in that direction but I’m not prepared to take an $8K hit on my transportation costs. On the other hand I could really cheap out and haul my family around for $2K. Wait – I’m doing that already.
      I’m leaning towards a VW TDI next time. Saving fuel with a modest upfront cost.

  • avatar

    A Mazda with competitive hp/mpg? I’ll believe it when I drive it. (I’ve had all 3 generations of protege)

  • avatar

    Of course, your mileage may vary.  If you mostly put on highway miles, a hybrid doesn’t do you much good.  For stop and go city driving, I expect the Prius will kick Mazda’s butt.  But for most American’s, the Mazda is probably the better investment.

  • avatar

    It takes a long time to recoup the cost of a hybrid.  A very long time.  People still buy them, but they don’t make much sense from an economic standpoint.

    • 0 avatar

      People still buy cars that can do 0-6 in under 6 and don’t recoup their time saved versus a slower car.
      People buy trucks and crossovers that haul stuff and never recoup the value of goods hauled versus the vehicle’s price premium over a small car
      Why are hybrids the only cars that need to economically justifiable?  If every car faced a same test, we’d be up to our armpits in Toyota Tercel wagons.

    • 0 avatar

      Buying anything other than a mainstream subcompact car is economically silly, but we do it anyways.  Imagine if you had to economically justify the purchase of an Aston Martin Rapide over the similarly sized Mazda3 (at least in the interior).

    • 0 avatar


      I agree that you should not have to justify your purchase in terms of payback UNLESS saving money on gas is the reason you buy the car.
      If so, forgetaboutit.

      But if you buy for social or philosophical reasons, or even just because you like new technology, there is no need to justify it. Drive it and enjoy your purchase.

      And I don’t feel like I have to justify to a B&B above about the payback of the ecoboost.  I simply like turbo low end torque and Ford’s twin turbo is my poor man’s euro engine.

      I have been labeled as a Prius basher when I am not.  I like the investment of Toyota and others into new techs.
      The only problem I have with this car is the same thing I have with many, I just love to drive and drive like a goof. This is why I would more than likely not like the Fiesta over the Mazda2.  I would take the new Cayenne hybrid almost over any SUV, IF I had the cash.
      I think it is rated 0 to 60 at just over 6 seconds.
      That’s great performance for a hybrid.

  • avatar

    You want economy?  Buy any low priced, bottom feeder, econo-strippo boring car for cash, run it for ever with no maintence, and pull the plate and walk away when it dies in a couple of hundred thousand miles.  Shed no tears. Next?

  • avatar

    The Prius still gets 25% better fuel economy, but this is still quite good.  No stop/start or regenerative braking either.  It shouldn’t cost much more than the current Mazda2, if at all.  Based on these figures, the Mazda2 with the new Sky engine should get 40mpg on the combined EPA cycle.  Really nice.  I’m hyped and I can’t wait.  It’s not an inconceivable feat, either.  Honda used to have cars that pulled numbers like this.  Look at the ’95 Civic VX.  Right on par with this Mazda.

  • avatar

    “The conventional, ICE powered Demio is just a tad less efficient than Toyota’s Prius, which gets 38km per liter”
    The Prius is ~20% more efficient.  That’s considered “a tad” these days??

  • avatar

    Good for Mazda.  The compression ratio doesn’t frighten me either, I’ve heard that DI would bring the possibility of diesel type compression ratios to gas engines.

    Merc talked about these high compression engines too, still remain to be seen.

    This mazda yields 84.44 MPG if u use Imperial gallon.
    Thats almost those 100 mpg carb we always read about but never actually seen it.
    84 thats pretty high anyways.

  • avatar

    What RRocket said.
    And that Demio is awfully dinky looking. How many hundred pounds less does it weigh?
    I vastly prefer ICE. I fear that hybrid technology is taking on a life of its own based on cachet as much as real value. But I’m not convinced that this example is all that impressive. And I badly want to be convinced.

    • 0 avatar

      The US spec Mazda2 weighs 2300 lbs.  It in no way will compete with the Prius.  The fuel economy isn’t as good, it’s a size class smaller, it costs a lot less, and it will be much more of a driver’s car, without things like LRR tires.  The fact that it matches the Fit hybrid probably says more about how lame Honda’s IMA system is.  40mpg combined (highway will be even higher) is still outstanding though for a standard ICE (the best, actually).  I thought that they would wait until the Mazda2’s redesign to give it the sky engine, but it sounds like Mazda is dropping it into the MY2012 car, which is fantastic, but it kinda sucks for anyone who buys this year’s Mazda2.

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