More MBS CoverageTRAVERSE CITY, MI – The good news is Chrysler Group’s Jeep Liberty CRD, powered by a diesel engine, is exceeding sales forecasts in the U.S., Frank Klegon, vice president-product development process and components, says.

Klegon takes over as executive vice president-product development Jan. 1. His replacement should be named in the next few months, he says.

The bad news is popularity is not the determining factor in the growth of diesels in the U.S., where pending strict emissions standards threaten their future viability.

In the first seven months, Klegon says Chrysler built 8,300 diesel Liberties and sold more than 6,000, including 850 units in July, alone. That exceeds the original forecast of 5,000 units, and it reinforces Klegon’s belief in diesels as a strong near-term solution to the need for better fuel economy and fewer harmful emissions.

Diesels are embraced by buyers of the heavy-duty Dodge Ram pickup; 70% of the 200,000 annual sales have a Cummins diesel as the powertrain choice.

But Chrysler still needs a strong business case to expand its offerings of diesel-powered light vehicles in the U.S., Klegon says at the Management Briefing Seminars here.

He tells Ward’s a decision on offering a diesel Jeep Grand Cherokee or Chrysler 300 in the U.S. still is about a year away.

In Europe, 60% of Chrysler products are sold with diesels. But they cannot be sold, unchanged, in the U.S. Lack of harmonization of standards remains significant, Klegon says.

The Liberty had to add onboard diagnostics for the U.S.; towing capacity is important in the U.S.; high-speed performance matters in Europe.

The other problem in the U.S. is that low-sulfur fuel requirements are not phased in until the end of 2006. In the meantime, fuel varies widely, making vehicle-calibrations difficult, Klegon says. The Liberty required hardware system changes for long-term protection in the U.S.

On a positive note, Klegon says he believes DaimlerChrysler AG products will meet Bin 5 standards “in the new future.” And he is encouraged by tax credits in the U.S. government’s new energy bill for advanced technology, a huge incentive for consumers, he says.

Klegon also advocates the use of biodiesel fuel. B5, which is a blend of gasoline with 5% renewable biodiesel derived from soybean, is used to fill Liberties at the factory. Government fleet use is testing B20 (20% mix), Klegon says.

Like any new alternative, he says widespread infrastructure does not yet exist for biodiesel fuels.

apriddle@primediabusiness.com