More stories related to New York Auto Show NEW YORK – Mercedes-Benz promises it eventually will add a diesel version of its forthcoming R-Class cross/utility vehicle alongside gasoline versions in the U.S.

The R-Class hits the U.S. in October with a 3.5L V-6 and a 5.0L V-8, capable of 268 hp and 302 hp, respectively. A 3.2L diesel engine will be available in Europe from launch, and could be available in the U.S. as soon as 2006, Paul Halata, president and CEO of Mercedes-Benz U.S.A. Inc., tells Ward’s.

R-Class production is based in Vance, AL, alongside the M-Class CUV, which goes on sale this week.

Mercedes unveils the all-wheel-drive 6-seater at the auto show here, assuring a sub-$50,000 price tag. The R-Class is 1-in. (2.5 cm) longer than the fullsize S-Class sedan.

Mercedes R-Class

The auto maker declines to give volume projections for the R-Class, but believes the timing to launch the R-Class in the U.S. is perfect, as demand for big-engine trucks and SUVs seems to be softening, Halata says.

The R-Class has a standard 7-speed automatic transmission, which brings a 4% fuel-economy gain to the package.

“Our engines are very efficient engines, so for us this (softening) has not become an issue,” Halata says.

“We strongly believe there’s a market (for diesels in the U.S.), but remember we only can market the car in 45 states,” Halata adds, referring to the coalition of “Green States” – including New York and California – where Mercedes diesels don’t meet regulations.

He says the E-Class’s 3.2L I-6 turbodiesel is selling well in 45 states, but the auto maker has chosen to hold off on an R-Class diesel until a later date.

“We get a lot of negative feedback not selling the car in California,” Halata says.

Stricter Tier II Bin 5 regulations are coming in 2007, which will provide more uniformity and long-term structure to regulatory standards. Many auto makers, including diesel juggernaut Volkswagen AG, are holding off on introducing new diesels until the rules take hold.

But Mercedes may not wait. Halata says the diesel R-Class could come in the first full year of production.

The R-Class plays in a CUV segment that is flourishing in the U.S., up 12.5% vs. like-2004. However, mid-luxury CUVs are slumping, posting a 22% deficit through the first two months.

jstoll@primediabusiness.com