Clean diesel: The yin to the hybrid's yang

The Orange County RegisterMay 18, 2013 

BIZ AUTO-FUELECONOMY 2 LA

Melvin Orellana details a new Audi A8L TDI with Audi Diesel TDI technology at the LA Auto Show in November.

AL SEIB — MCT

What do the Chevrolet Cruze, Jeep Grand Cherokee and Mazda6 have in common? Generally, not much.

But this year all three vehicles will be offered with optional diesel engines, an unprecedented proliferation of a technology traditionally offered by German automakers.

“There’s no shortage of manufacturers investing in (diesel engines),” said Jeremy Acevedo, an industry analyst with Edmunds.com. “Now, they just need to resolve its image. For a lot of consumers here in America, they think of loud, gurgling cars pluming smoke.”

Today’s diesel is a far cry from Grandpa’s. Billed as “clean” or, as Jeep calls it, “eco,” modern diesel fuel is an ultra-low-sulfur formulation with dramatically lower emissions than previous-generation diesels while also offering a peppier driving experience and up to 35 percent better fuel economy compared with gasoline. The downside: Diesel costs more, for both the vehicle and the fuel.

While diesel cars account for about half of the European market, just 3 percent of new passenger vehicle sales in the U.S. are diesel, according to Dave Cavano, car buying service manager for the Automobile Club of Southern California in Los Angeles. There are more than 500 gasoline-powered passenger vehicles sold in the U.S. market, he said, compared with 31 diesel vehicles, more than half of which are trucks and vans.

That is changing. This year, Audi, BMW, Chevrolet, Jeep, Mazda, Mercedes-Benz, Porsche and Ram are all introducing new diesel passenger vehicles.

Traditionally, Volkswagen has dominated the market with diesel versions of its Beetle, Jetta and Passat. Audi, which has offered its A3 hatchback and Q7 SUV as diesels, this year is expanding its portfolio to the A6, A7, A8 and Q5.

BMW will offer its 328 and 7-series sedans as diesels. And Porsche, which last year added a diesel version of its Cayenne SUV, will introduce its smaller Cajun SUV as a diesel for the 2014 model year.

The biggest news, however, is that after years of sitting on the sidelines Japanese and American automakers are introducing small diesel vehicles.

“All the manufacturers in the U.S. are scrambling for ways to improve their mpg,” Cavano said. “The Germans like diesel. Japanese like hybrids. Chevy’s got the Volt. Nissan’s got the Leaf. So they’re shuffling technology to get to the 54.5 mpg average they need to meet by 2025” under the new fuel economy standard set by the U.S. government last year.

Prepared to pay more?

The question is whether U.S. consumers are ready to buy in to a technology that costs more.

The price premium for a diesel version of an ordinarily gas-powered car varies by make and model. While the new Mercedes-Benz GLK250 BlueTEC that came on the market last week costs less than a comparable gas model, many diesels come with a $2,000 to $3,000 price premium, according to Edmunds’ Acevedo. The diesel 2013 Jetta costs $2,680 more than a comparably equipped gas Jetta. The price premium for a hybrid version of a gas-powered car is roughly similar.

The biggest competition for diesel is “from squeaky-clean hybrids,” Acevedo said. “Customers might spend the price premium on a hybrid as opposed to diesel, because diesel is more expensive than gasoline. But the fact is, they are going to be increasing their mpgs.”

Oftentimes dramatically.

Looking to the future

The Chevrolet Cruze Clean Turbo Diesel coming on the market later this month in select U.S. cities will yield the best fuel economy of any non-hybrid car for sale in the U.S., General Motors says, with an EPA-estimated 46 mpg highway. On a single tank of fuel, drivers could travel up to 700 miles.

“The Cruze is the vehicle all eyes are going to be on for the future of this segment because it’s a volume seller from one of the biggest automakers,” Acevedo said of the car with a starting price of $24,885. By comparison, the gas-powered Cruze, which gets up to 38 mpg, comes with a starting price of $17,130.

“When Audi first came out with the clean diesels, sales were a little tough,” said Matt Crandall, general manager of Commonwealth Audi in Santa Ana, Calif., which now sells half of its Q7 SUVs in diesel and half in gasoline. “The more we educate the customer, the more diesels are coming back.”

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