Detroit Determines Diesels Are Dreamy

Detroit awakens to benefits of Europe's diesels Wednesday March 5, 11:14 am ET By

GENEVA, March 5, 2003; Michael Ellis writing for Reuters filed this report: As a child growing up in New Jersey, Mark Fields had a nickname for the diesel-engine truck his neighbor drove to work every morning.

"I used to call it the alarm clock," said Fields, the head of Ford Motor Co.'s luxury vehicle group, which includes Volvo, Land Rover, Aston Martin and Jaguar.

"He used to start up at 7 o'clock in the morning and I used to wake up for school because it was so loud," he told reporters at the Geneva auto show.

Many Americans share similar memories of diesels as noisy, smoke-belching, smelly beasts only truck drivers would want.

A recent study by J.D. Power and Associates of 5,200 car buyers confirmed that most Americans have negative impressions diesels, contrary to the perception in Europe where diesels account for 40 percent of new passenger vehicle sales.

But the same study found that 40 percent of those Americans would consider buying a diesel engine car or truck after learning that today's diesels are not the loud and stinky engines of 20 to 30 years ago.

Diesel engines get about 25 percent to 40 percent better fuel economy than gasoline engines, and have more torque for quicker acceleration and better towing, which is why they are loved by U.S. heavy truck drivers. Diesel could also trim the U.S. dependence on foreign oil.

Though several automakers offer diesel engine trucks in the United States, Germany's Volkswagen AG (XETRA:VOWG.DE - News) is the only major automaker currently selling diesel engine cars.

Volkswagen's sales of diesels, available as an option on the New Beetle, Golf and Jetta, jumped 24 percent last year, but they still only totaled 31,220 units -- only about two of every thousand vehicles sold in the United States industry-wide.

CHEAPER RIDE

But with the popularity of diesels in Europe, where government tax incentives and the better fuel economy make diesel engines a much less expensive alternative to gasoline engines, some automakers are trying the technology in the United States.

"I think the American consumer is ready for diesel," said Jim Schroer, head of sales and marketing for the Chrysler Group, the U.S. arm of DaimlerChrysler AG .

DaimlerChrysler will launch two diesel vehicles in the U.S. market next year as an option on the Jeep Liberty sport utility vehicle and on the Mercedes E-Class luxury sedan.

DaimlerChrysler's Mercedes chief Juergen Hubbert said the German brand aims to offer more optional diesels engines in the future.

VW will soon also offer the a diesel engine option on its upscale Passat sedan, and other automakers are watching the market closely.

Ford has a fleet of Focus small cars with diesel engines that it is testing in the United States.

"I think we are seriously looking at diesel potential in the U.S.," said David Thursfield, the head of Ford's overseas operations. "There is a mindset in the U.S. that diesels are all tractor engines that clack away. That myth I think is exploding now. The diesel technology now is totally different than when GM tried to introduce diesel back in the 1980s."

GM, which rushed poorly engineered diesels to market more than 20 years ago in response to gas shortages, is considering more new generation diesels for fuel-thirsty sport utility vehicles, GM officials said. The brawny vehicles are under attack by environmentalists for excessive fuel consumption and greenhouse gas emissions.

NATURE'S CURE

But many environmentalists argue that diesel engines are not nature's cure. America's dirtier diesel fuel has rougly ten times as much acid rain-producing sulfur than European diesel fuel. Diesel engines also produce more nitrogen oxide, which creates ozone and can cause respiratory problems.

New U.S. regulations will make cleaner diesel fuel available in a few years, and "particle traps" under development could catch most of the dirty emissions from diesel engines before they are released into the air.

Economic hurdles also remain. Unlike in most of Europe, diesel and gasoline fuel is sold at nearly the same price in the United States. Americans could save money with diesel because they would use 25 to 40 percent less, but that would be offset by the higher costs of diesel engines, the automakers said.

And with the price of fuel up to three times as cheap in the United States than in parts of Europe, fuel economy is a low priority for many Americans.

J.D. Powers Walter McManus said that, as cleaner diesel engines become available over the next few years, diesel-powered vehicles could account for as much as 12 percent of U.S. new car and truck sales by around 2007, he said.

But once Americans drive or ride in a modern diesel engine car, they'll find out how quiet they are now, McManus said. That should make automakers, and kids growing up in New Jersey, sleep easier.