Businessweek Archives

The Diesel Armada


Thinking of buying a clean-diesel car to get better mileage? You might want to wait until 2008. European and Japanese automakers are about to invade the US market with new clean-diesel models that get far better mileage than the same gasoline-burning model. But most will hit the market next year. Equipped with new soot-cleaning technology, many will meet even the strict emissions requirements of California, and will be sold in all 50 states.

We’ve flagged the diesel trend already — but the momentum now is gaining critical mass. Among the many contenders, Mercedes will offer its SUVs — M-Class, R-Class and GL-Class —with diesel engines. BMW aims to bring its popular turbo diesel engines to US models. And Nissan is coming with a diesel Maxima sedan. Volkswagen was an early pioneer in diesel in the US, but it will convert to new cleaner diesel technology in models starting 2008, which it dubs “Blue Motion.” VW is betting its new TDI Jetta, which launches in February, will help stoke its US sales.

As recently as a year ago, when I wrote about Mercedes’ plans to bring clean diesel luxury sedans and SUVs to the US, hybrids were all the rage. Many still believed that Americans would never embrace diesel cars, recalling the sooty emissions of 1980s models. But high gasoline prices and growing criticism of the energy efficiency of ethanol are giving new-generation diesel cars greater appeal. Now the buzz about diesel is building daily.

The oil industry could help tip the scales. One big chicken-and-egg question a year ago was whether or not oil companies would actually invest in clean-diesel refining and user-friendly diesel filling pumps for passenger cars, laying the foundation for consumers to make an easy switch. (Diesel is only available at 42% of US filling stations.) Marathon Oil Corp.’s recent decision to invest $3.2 billion in a clean-diesel addition to its Garyville, Louisiana refinery is a clear bet diesel use will grow in a changing US energy landscape. “It demonstrates a growing sense within the auto and oil industries that increasing numbers of US cars and light trucks will run on diesel, becuse they get better fuel economy than those using gasoline,” says a May 3 Wall Street Journal article.

Even though hybrids got off to an early lede, market researchers are betting diesel cars will become more popular as consumers realize that hybrids save on fuel consumption only in city driving, while diesel cars consume 20-40% less than gasoline cars under all driving conditions.

At present only 3.6 percent of US vehicles sold have diesel engines, and most of those are light trucks. European’s long ago fell in love with fuel-efficient diesel passenger cars and more than half of cars sold in Europe are diesel.

Market researcher J. D. Power forecasts diesel cars and light trucks will take 11.8% of the US market by 2015 versus 4.86% for hybrids. And get this: French automaker PSA Peugeot-Citroen is already working on a hybrid diesel which would outperform both.


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus