The Other Green Engine: Diesel?
The Other Green Engine: Diesel?
European carmakers bet America is ready for a radical new vehicle.
By Joann Muller
Forbes.com
Looking for a fuel-efficient alternative to your current gas-guzzler? How about a car that gets 30% better fuel economy, doesn't require a giant battery in the trunk or have to be plugged into the wall, and can travel 600 miles between fill-ups?
Believe it or not, automakers may have a tough time selling those attributes to consumers later this year, when a new generation of diesel-powered vehicles arrives in dealerships. Images from the 1970s--of rattling engines and tailpipes spewing black soot--are hard to shake. And, thanks to superb marketing by Toyota maker of the Prius hybrid, Americans are convinced hybrids are the only green choice available, despite some discussion of diesel cars' potential.
Until now, that was largely true. Aside from heavy-duty pickups, only about 3% of U.S. light-duty vehicles are powered by diesel today. Tougher emissions rules bumped several diesels, like the Jeep Liberty, off the road in recent years. And in some states, like California and New York, diesels aren't sold at all because the state emissions laws are even tougher. (One exception: Mercedes E320 Bluetec--a special version was recently made available in California.)
But a new generation of modern diesels is on its way to all 50 states, led by carmakers based in Europe, where half of all consumers prefer diesels.
By late summer, the first of those modern diesels will arrive: the Volkswagen Jetta TDI. VW says it will get over 50 miles per gallon on the highway (40 mpg around town), and can go over 600 miles between fill-ups. Prices will start in the low $20,000s, about $2,000 more than a traditional Jetta.
Later this year, Mercedes, BMW and Audi will bring their own so-called "clean" diesels to the United States. By 2010, availability of diesel-powered cars is expected to jump sharply as other automakers, including Acura and Jeep, begin offering them, too. By 2017, J.D. Power & Associates forecasts 14% of cars sold in the U.S. will have diesel engines. Germany's Robert Bosch, a major supplier of critical diesel components, forecasts diesel penetration in light-duty pickups and SUVs will reach 20% by 2015.
"I'm pretty optimistic this might be just the beginning," says Daimler AG Chief Executive Dieter Zetsche. Daimler's Mercedes division sold 12,500 diesels in the U.S. last year, even without California or New York, its two largest markets. This fall, it will begin selling three SUV models with advanced diesel engines: the ML320 Bluetec, R320 Bluetec and GL320 Bluetec.
Diesel versions of BMW's 3-series sedan and X5 sport utility will also go on sale this fall. Says BMW Chief Executive Norbert Reithofer: "We realized that with the additional weight of a hybrid battery, the miles per gallon is not as good as we thought. We think the better solution at the moment is diesel."
But Reithofer admits BMW made a mistake by not pushing diesels years earlier, when hybrids started grabbing attention. Now, he and Zetsche agree: It will take the combined marketing efforts of all the European carmakers to turn Americans' heads. "We need an action together to sell diesels in the U.S.," says Reithofer.
One likely selling point: performance. Consumers want peppy performance, and thus, tend to buy bigger engines with more horsepower. But the rush you feel when you push the accelerator is thanks to the engine's torque, not its horsepower. A V-6 diesel can deliver as much torque as a larger V-8, with much better fuel economy.
There's another advantage to diesels: Their resale value is two to three times that of a traditional gasoline-powered car. VW spokesman Keith Price, for example, says a 1998 Jetta TDI (diesel) with 175,000 miles is worth $7,500 today. The same car, with a 2.0-liter, four-cylinder gasoline engine "is a $2,000 'beater' you'd buy for your teenager."
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