No automaker has pursued the development of fuel cell vehicles more aggressively than Honda (HMC) – or with greater imagination (See “Round 1 – Chevrolet Equinox“). Not content with merely demonstrating a hydrogen-powered car, it has also taken on the challenge of refueling the car as well.  It has developed a commercial hydrogen station powered by solar energy, as well as a home energy station that generates hydrogen from natural gas. That’s called covering all your bases.

When Honda offered me an opportunity to drive its latest fuel cell model, I grabbed it. The eggplant-colored FCX Clarity stopped traffic when it pulled up to my West 86th St. apartment house one Friday evening. No wonder. Advances in fuel cell packaging allowed Honda to lower the floor of the vehicle, extend the cabin length, and shorten the front overhang. The Clarity has the profile of a Lamborghini but with the interior comfort of an Accord.

Getting settled behind the wheel takes a little doing. The instrument panel is a dazzling array of lights and gauges that graphically display the car’s range in miles, as well as the state of charge in the lithium-ion battery that provides accessory power. As in a German luxury car, the lever for the shift-by-wire transmission is housed on the dashboard. Since the car is driven by an electric motor, there is essentially only one forward speed: D.

Turn the key, push the start button, and you are underway in the nicest Honda you’ve ever driven. Honda has solved many of the packaging issues that arise when fuel cell machinery is stuffed into a passenger car body. It has shrunk the fuel cell stack so that it can reside in the center tunnel where the driveshaft for a conventional automobile might be. Meanwhile, the single hydrogen storage tank is placed above the rear axle, though it steals a bit of trunk space.

Some lucky individuals will be able to lease a Clarity from Honda for $600 a month. As long as they don’t drive farther than 270 miles between hydrogen fill-ups, they should enjoy the experience. Judged by sophistication and execution, the Clarity is a far more refined product than the Chevy Equinox I also drove recently, though the Equinox scored points for comfort and quietness.

Some of the difference between the two vehicles may be explained by the different emphasis placed on fuel cells by their respective manufacturers. Fuel cells and their electricity-generating technologies are a core technology at Honda, while at GM (GM), they seem to have been eclipsed by the range-extended electric vehicle device in the Chevy Volt. In any event, reaching mass production for either of these vehicles – and creating the nationwide hydrogen refueling infrastructure required – will be an enormous task in a credit-starved world. Environmental nirvana remains a long way off.

See a video of the Honda FCX Clarity.

In searching for a replacement for the internal combustion engine, automakers have long viewed the fuel cell electric car as the ideal solution.  It is powered not by gasoline but by hydrogen, and it leaves behind no noxious emissions, only water vapor.

That prospect of green-motoring Nirvana has led the world’s most prominent automakers to wager hundreds of millions of dollars that the advance of technology would solve a few niggling problems in the way of commercial feasibility for fuel cells – notably cost, size, availability of fuel and access to refueling stations.

Lately those shortcomings have loomed larger while other alternatives like plug-in hybrids have grown in popularity, producing diminished expectations for fuel cell vehicles.  According to a recent survey by the University of Michigan Transportation Research Institute, only two percent of all the cars sold in the U.S. are expected to be powered by fuel cells in 2020, compared with 15% for advanced diesel, 24% for hybrids and the majority by conventional engines.

But the dimming prospects for fuel cells hasn’t stopped General Motors (GM) from its announced determination to produce a saleable vehicle by 2010.  As a demonstration of its progress, it is making a fourth-generation test vehicle, a Chevy Equinox SUV laden with three hydrogen tanks, available for test drives. (A more advanced fifth-generation vehicle isn’t yet ready for prime time).

The two most important things to know about the Equinox are: One, it drives nicely – like a more expensive conventional vehicle - and two, it only goes 170 miles before it runs out of hydrogen. Number two looms really large.  Should your supply of hydrogen expire, you can’t just grab an empty gas can and head to the nearest service station.  Refilling a hydrogen tank to 10,000-pounds-per-square-inch pressure requires special equipment and supplies of hydrogen  that are available in only a handful of locations nationwide.

While earlier GM fuel cell vehicles featured controls lifted from the spaceship Enterprise, the Equinox is a  model of normalcy. No longer do you need a GM engineer in the passenger seat.  Turn the ignition key to the “on” position, wait a few seconds for the system to warm up, press the accelerator, and you’re off.

In the Equinox, your progress is stealthy – no engine noise – and swift – the electric motor requires no transmission  and hence there is no shifting of gears. To use a verb lifted from a Rolls-Royce brochure, you are wafted along.  A couple of differences: The brake pedal feels a bit stiff because it is less progressive and the hydrogen tanks eat up some storage space.

Keeping my eyes glued to the distance-to-empty gauge (which was thankfully more reliable than some others I’ve encountered),  I managed to motor back to New York City from the Berkshire Hills with some (hydrogen) gas still in the tank.  A gasoline- and emission-free car of the future that drives just like one you can buy today is a brilliant use of new technology.  But those more-than-niggling problems I mentioned at the outset mean there won’t be anything like the widespread use of fuel cell cars for a long time.

Next: Round Two – the Honda FCX Clarity

Whenever she came down with a case of the mean reds, Holly Golightly ran down to Tiffany’s for breakfast.  Car dealers should be so lucky. If they haven’t fallen into catatonic shock this week, they aren’t paying attention. October sales are running a stunning 40% below a year ago, and  GMAC announced that it would no longer provide credit to less than the best customers – thereby removing one quarter of the potential owners from the market.

A shortage of buyers is not likely to be a problem for the Honda Fit, one of the smallest, most stylish – and yet most utilitarian cars on the market. Sales have been rising steadily since the Fit arrived here from Japan in 2006. Through September, Honda had sold 63,638 Fits, up from 41, 085 in 2007, and even at that,  demand was limited by supply.  Expect about 85,000 Fits to find homes in the U.S. this year.

Fit is the ultimate expression of Honda’s long-time philosophy “Maximum man, minimum machine.” It can haul five passengers with their luggage in a vehicle little more than 13 feet long and weighing about 2500 pounds. In addition to its superior management of interior space, the Fit is a masterful conservator of the environment. The Fit is rated at 27 mpg city/33 mph highway, and during some 500 miles of mostly highway driving – at times loaded with passengers and gear – I managed right around 33 miles per gallon.

The price of all that fuel economy is a certain lack of pep.  The Fit is powered by a 1.5 liter engine that generates a mere 117 horsepower. The absence of oomph is particularly noticeable on long uphill runs, such as a stretch on the Massachusetts Turnpike heading east from Exit 2 that climbs until it reaches the highest point on 1-90 this side of the Dakotas. Zero to 60 times are unofficial but figure on 8.5 seconds – nobody’s idea of quick.  Although the automatic transmission was slow making shifts at times, the engine never sounded buzzy nor felt less than willing to give its all.

All that Honda utility came at a $19,430 sticker price for my fully equipped Sport model.  It included such surprising standard equipment in a small car as a navigation system with voice recognition and stability control. I felt like a big spender.  Twenty thousand dollars will buy some nice baubles at Tiffany’s but I’ll take a Fit to cheer me up any time.

As auto sales have cratered, some manufacturers and models have suffered more than others. Exhibit one is the Ford Flex. A brave attempt at rethinking the concept of the people-mover, the Flex has stalled at the starting gate. Its failure could cause some serious rethinking at Ford about its design and marketing, as well as at its competitors who are introducing similar vehicles.  Did somebody say “Chevy Traverse?”

Production of the Flex began in early June and television advertising popped shortly thereafter.  Rather than focus on the vehicle’s soccer-mom attributes or its novel, flat-roofed, channeled-side design. Ford  went a different direction. Really different.  Recent Ford models have come off as a bit stodgy, so marketers decided to position the Flex as kind of a dance club on wheels.  It was photographed against an inky nighttime background and shown from the front so its extreme length (it has three rows of seats) was not pronounced.

The campaign’s theme is “Electrifying the Night”  but customers aren’t turned on.  Ford had hoped to sell 75,000 to 100,000 Flexes a year but managed less than 2,000 (1969 to be exact) during September.  Do the math and you come up with sales of 24,000 annually. Competitors like the new Honda Pilot and the one-year-old Toyota Highlander didn’t have great months in September either, but still sold 5,192 and 5,729 units respectively (according to Automotive News).

“The Flex is a secret but it’s growing,” says Ford marketing boss Jim Farley.  He says he should have begun advertising sooner to draw buyers to the new model. “There aren’t a huge number of conquest customers coming in to Ford showrooms,” says the former Toyota executive. “It is harder to launch another new Ford crossover than it is a Yaris at Toyota.”

In Flex’s favor is that it is distinctive, well-executed, and scores well in independent tests.  But with a market heavily favoring high-mileage small cars, large ones have a hard time measuring up.  Flex is rated at 17 miles per gallon city; 24 highway.  “Even though it may get good gas mileage and have other positives, the Flex simply looks big,” says J.D. Power analyst Tom Libby.  “That puts it at a disadvantage from the start.”

The reception accorded the Flex should give pause to the folks at Chevrolet, whose own full size crossover, the Traverse, hits the market any day now. Do they go back to basics and tout cupholders, child seat anchors and DVD players? Or do they try to one up the Flex by putting more lipstick on the pig?

Model-line quality data compiled by JD Power and Associates finds its way into the media only rarely because the California survey firm guards it to avoid embarrassing clients.

So when Power’s 2008 Initial Quality numbers for midsize cars leaked recently, they warranted some further scrutiny.  And parsing the numbers reveals some surprising developments

First, some background:  For years, Power has been measuring the quality of cars after 90 days of ownership by surveying their owners.  Everything counts the same: A malfunctioning ashtray is tabulated with the same weight as a seized engine. In the last couple of years, Power has been subdividing the complaints into design problems and defects/malfunctions but the totals remain comparable with previous years – and carries enormous bragging rights.

As long as I can remember, Japanese manufacturers have been regarded as the gold standard in quality.  No more.  This year’s IQS winner in the midsize segment, by a healthy margin, is the Chevrolet Malibu, with a mere 80 problems per 100 customers. That’s an excellent showing for a car in its first year of production, when assembly plants are still learning how to put the pieces together.

Other non-Asians also did well. The Ford Fusion finished third with 88 problems, the Volkswagen Passat ranked fourth with 94, and the Buick LaCrosse came in fifth with 96. Buick traditionally scores well in these surveys, but Ford and VW are both moving up the charts.

To be sure, two Japanese models, the Mitsubishi Galant and Toyota Camry also finished in the top five. But the Nissan Altima finished below average, as did, shockingly, the Honda Accord. Nissan is typically an also-ran in quality, but Honda has been a leader in the past. The 2008 Accord – another model in its first year of production – fell all the way from second in last year’s midsize survey with 22 more defects per 100.

Bringing up the rear in the midsize quality ranks was the Subaru Outback Wagon – another historical also-ran – and two Chrysler products: the Dodge Avenger and the mechanically identical Chrysler Sebring. They recorded 171 and 183 defects respectively, more than twice as many as the Malibu.

A couple of conclusions can be drawn from this data. One, it is possible for American mass-producers to equal or better the quality of their overseas competitors. And two, it still makes sense to avoid purchasing a car during its first year of production – even though that car may carry a famous Asian name on the trunk lid.