Zetsche: Mercedes With Clean Diesel Engines Can Storm U.S. Market

BERLIN January 15, 2006; The AP reported that DaimlerChrysler AG's chief executive said in a Sunday newspaper interview that clean diesel engines offer an opportunity to conquer luxury auto markets in the United States.

Tough environmental regulations in states including California are opening new markets for the U.S.-German company's Mercedes brand, Dieter Zetsche told the Welt am Sonntag.

"We will make the most efficient engine there is -- and that's a diesel -- as clean as a petrol, and thus open the way for a triumph of diesel on the U.S. market," Zetsche was quoted as saying.

DaimlerChrysler's latest BLUETEC diesel technology, which it presented at the North American International Motor Show, gives the company an "incredible opportunity" to lead the field, Zetsche said.

Other German carmakers could join the project, Zetsche added. He didn't identify the likely candidates.

DaimlerChrysler has said that BLUETEC, which will make its U.S. debut this fall on the 2007 Mercedes E 320 sedan, is so clean it can meet emissions regulations in all 50 U.S. states. That includes five states where diesels aren't currently sold because they can't meet emissions standards.

Only about 3 percent of the vehicles sold in the United States last year had diesel engines, compared to half the vehicles in Europe.

The brand's quality problems had been solved, said Zetsche, who also heads the Mercedes Car Group within DaimlerChrysler. "We will soon be back at the absolute top," he said.

However, he would not be drawn on whether the number of jobs to be cut in a shake-up at Mercedes would rise above the 8,500 already announced.

"To what extent the adjustment we are making in employment leads to a stable employment situation will be defined by our success on the market," Zetsche said.