AUBURN HILLS, MI — DaimlerChrysler AG's Chrysler Group has begun shipping a diesel engine version of its Jeep Liberty sport/utility vehicle to dealers, according to the Detroit News on December 28. The Liberty is the first mid-size SUV in the United States with a diesel engine, and hits the market at a time when high gasoline prices are spurring drivers to consider vehicles with better fuel economy. Chrysler has modest goals for Jeep Liberty diesel, projecting to sell about 5,000 next year. But the automaker says early interest in the SUV has been very strong — 50,000 consumers have indicated interested in the diesel Liberty — and could spur the company to produce more. "We are pleased with the initial response," said Jeff Bell, vice president of Jeep marketing. Chrysler says diesels, which offer about 30-percent higher mileage than gasoline engines, will have a place alongside hybrids on U.S. roads. Auto industry forecaster J.D. Power and Associates predicts diesels will reach 1 million, or about 6 percent of U.S. auto sales by 2009, up from 450,000, or 2.5 percent today. Hybrids, meanwhile, will tally 506,000 sales in 2009 for slightly less than 3 percent of the market. "The reason we see diesels becoming more popular than hybrid vehicles is that consumers are more familiar with the technology, believe in the reliability of diesel technology and are aware of the fuel efficiency," said John Tews, a J.D. Power spokesman. A government mandate calling for the production of low-sulfur diesel fuel by the fall of 2006, which will reduce the smog-forming emissions from diesel engines, also is expected to entice more buyers. Germany's Volkswagen AG offers all U.S. models with a diesel engine, except its Phaeton luxury sedan, and is seeing diesel sales grow. This spring, after sidelining U.S. diesels several years ago, Mercedes-Benz introduced the diesel-powered E320 CDI sedan, and Detroit automakers offer diesels in large pickups. Chrysler says Liberty's 2.8L turbo diesel, built by Europe's VM Motori, has 60-percent less carbon dioxide emissions than diesels of 20 years ago, that noise-dampeners help silence its engine and that new ceramic "smart" plugs start the car immediately without the 10-second warm-up needed on old diesels. Yet five states — California, New York, Massachusetts, Vermont, and Maine — will still not allow Liberty diesel to be sold because even modern diesels emit pollutants that are smog-producing and potentially carcinogenic. Liberty diesels began trickling into dealerships in December, but Chrysler will not start advertising the vehicles until March or April, when more models are on the ground, Bell said. A multimedia advertising campaign will mainly highlight the vehicle's 500-mile range on a single tank of fuel, compared with about 325 miles on the gas-powered Liberty. Marketing will also tout the model's 5,000-pound towing capacity, 160 horsepower and fuel economy of 22 miles per gallon in the city and 27 on the highway.

Originally posted on Fleet Financials