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BMW pushes its diesel cars

Posted by: David Welch on July 29, 2009

Finally, a carmaker is trying to promote diesel in a meaningful way. BMW said this week that the company will offer $4,500 in “eco credits” for anyone who buys a 335d or X5 diesel. Eco credit is basically a euphemism for a rebate since a customer can use it like cash towards a purchase of the diesel Bimmer.

European automakers have been selling diesel cars in the U.S. for quite some time. But they haven’t marketed them really aggressively. But with new tougher fuel economy rules, called Corporate Average Fuel Economy, or CAFÉ, set to kick in starting in 2011, they’ll need a play to meet them, especially BMW and Mercedes. European luxury carmakers have long seen CAFE fines as a cost of doing business since they don’t sell enough small cars to balance out the lower fuel economy of their big sporty vehicles and suvs.

In BMW’s case, the company has paid some $90 million in fines since 2000, according to documents from the National Highway Traffic and Safety Administration. Mini’s rise in recent years has helped the company. One BMW executive says the company now has CAFÉ credits from 2007, 2008 and might earn more in 2009. But when those tougher fuel economy rules kick in, BMW will need better fuel economy. So getting customers to buy more 335d sedans, which get 27 mpg combined city and highway mileage, and X5 diesel (it gets a combined 22 mpg) will certainly help. If the marketing program raises more interest in diesel, that can only be a good thing. New clean diesel technology is a pretty good alternative to hybrids.

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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