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European Carmakers Bet That the U.S. Is Ready for Diesel

September 17, 2007

FRANKFURT, GERMANY - Betting that diesel power will become an alternative to the hybrids popularized by Toyota and other Japanese carmakers, Mercedes-Benz, BMW, and Volkswagen all plan to sell new diesel automobiles in the U.S. in the coming year, and many of them are on show at the Frankfurt Auto Show, according to the New York Times.

A lot of Americans recall diesel, circa 1983, as a dirty fuel that made cars noisy and hard to start on freezing winter mornings. But the technology, European car executives say, has advanced since then with the latest generation of diesel engines virtually indistinguishable from gasoline engines in performance. They emit less carbon dioxide (CO2) because they burn fuel more efficiently.

“We are well on the way to giving CO2 emissions the priority needed,” the chairman of DaimlerChrysler, Dieter Zetsche, said.

Europeans are experimenting with hybrids, too, but they no longer appear worried that Toyota and its Prius have cornered the market on climate consciousness — in part, some here say, because drivers have become more aware of the virtues of diesel power and the limitations of hybrids.

Like most German executives, Wiedeking sees a place for both hybrid and diesel-powered vehicles. “We have to confront hybrids,” he said, noting that Porsche planned a hybrid version of its Cayenne sport utility vehicle. Americans will soon be able to choose from an array of German diesels: three Mercedes sport utility vehicles, and its E-class sedan; and several BMW models. Volkswagen, which has sold a diesel version of its Jetta in the United States for several years, plans to introduce a new Jetta with a cleaner engine, as well as a diesel version of its new compact SUV, the Tiguan.

Today, fewer than 3-percent of passenger vehicles in the U.S. are diesel, compared with more than 30-percent in Europe. Last year, more than half of all new cars sold in Europe were diesel-powered. In Britain, BMW said it increased the diesel share of its cars to 70 percent from 7 percent in three years. Given the Japanese lead in hybrids, some analysts say that the Europeans are making a virtue of necessity.

“This is what the Europeans have got,” said Graeme Maxton, an independent auto analyst in Hong Kong. “They don’t have hybrids or hydrogen. This is their only card, so they’re going to push it.”

Maxton predicted that with a slowing economy and fragile consumer confidence in the United States, it would be an uphill struggle for the European companies to make major inroads with diesel now.

But the Europeans are not the only ones pushing the technology. General Motors and Ford plan to sell more pickup trucks with diesel engines, and G.M. will produce a new diesel engine at a plant near Buffalo.

Gregg Sherrill, chief executive of Tenneco, an auto parts company that supplies exhaust systems to American, European, and Japanese makers, said, “Pickups will be one wedge to bring diesel back into the U.S., while the European carmakers will be the other.”

Citing a survey commissioned by Tenneco, Sherrill said policy makers in the United States recognized the potential of diesel engines as a way to curb emissions, although they view hybrids as the No. 1 option.

Much of the innovation in European diesel technology has been animated by the need to abide by tighter restrictions on emissions in the United States, particularly on nitrogen oxide, which contributes to urban smog and is viewed as a major drawback of diesel.

German carmakers use a treatment process in the exhaust system that cuts nitrogen oxide emissions. Volkswagen calls its approach BlueMotion; Mercedes promotes BlueTec.

Mercedes began selling its E-class cars with a BlueTec engine in the United States in 2006, but was hampered because it did not meet emissions standards in five states, including New York and California. Next year, the company said, it will be able to sell its diesel models in all 50 states.

Mercedes executives said Americans would accept diesel engines as long as their performance matched that of gasoline engines. But in what may be an implicit acknowledgment that diesel power has some image problems, the cars will carry badges on their trunks saying BlueTec, not diesel.

And in case “clean diesel” cannot overcome diesel’s old reputation in the United States, Mercedes showed something here called DiesOtto — a prototype of a hybrid gasoline-diesel engine that it says combines the best of both. The name comes from combining Diesel with Otto, the inventors of the two types of engines.

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