LOS ANGELES – Anxious to bring diesel powertrains to its U.S. showrooms, BMW AG is keeping a watchful eye on the diesel fuel supply.

“When high-quality diesel is available, and we can sell diesel products in 50 states, we will (do so),” says Tom Purves, BMW of North America LLC's CEO, in a speech to journalists at the Greater Los Angeles Auto Show here.

But Purves tells Ward's he is not wedded to his 50-state rule. When cleaner fuel becomes widely available in enough markets to generate a critical mass of sales, he will consider offering diesel products here, he says.

Federal regulations mandate low-sulfur diesel fuel must become the standard by the end of 2006.

Purves reveals neither the number of states nor the level of sales that constitute BMW's threshold. But he suggests California need not be among the favored states, even though it accounted for 15% of the brand's total U.S. sales in 2005.

Total U.S. sales of 266,200 units last year gave BMW a 2.5% boost over 2004, marking BMW's 14th consecutive year of growth in the market.

Diesel engines made a poor first impression when they debuted on U.S. cars more than two decades ago. The early powertrains belched soot – loudly.

Tom Purves

But Purves dismisses the notion such images will haunt the technology until the next generation of drivers comes along. “That's what they said about Europe,” he tells Ward's.

Today, diesel engines power 60% of BMW vehicles sold annually in Germany and the U.K. And in Italy and France, the penetration rate is 90%.

“While diesel has pretty much been off the map in this country, due to fiscally driven demand, it has quietly become a very good green alternative in world markets – particularly in Europe,” Purves says in his speech.

“Modern diesel engines are smooth, efficient and powerful. And BMW will continue to explore high-technology solutions that will bring BMW diesel engines to the US market.”

Purves also suggests BMW has a ready supply of diesel-powered vehicles that are well-suited to the U.S. market. The auto maker's plant in Spartanburg, S.C., is its sole source of X5 SUVs, and many of the units it builds for export are equipped with diesel engines.

But BMW is not just banking on diesel.

“Not one technology will dominate the industry ever again, at least not in the way that gasoline shaped the auto industry in the 20th century,” Purves says.

That is why the auto maker is developing hybrid-electric vehicle powertrains in partnership with DaimlerChrysler AG and General Motors Corp. (See related story: BMW Joins GM, DC Hybrid Program)

BMW also is exploring the use of super capacitors to power its own HEV system. The result, Purves suggests, would be “a true performance hybrid, if you like,” he says. “Just what you'd expect from BMW.”

Additionally, the auto maker also is exploring hydrogen as an alternative fuel. Purves says BMW will, in the next 12 months, begin launching a test fleet of 7-Series sedans equipped with internal combustion engines that run on hydrogen. (See related story: BMW Puts Eggs in Hydrogen Basket)

emayne@primediabusiness.com