More stories related to 2005 Greater L.A. Auto Show LOS ANGELES – Volkswagen AG will be ready to meet the forthcoming challenge of tougher diesel rules in the U.S. slated for 2007.

“We think that given the emission legislation (for) 2007, we can comply,” Chairman Bernd Pischetsrieder says following a speech here at the Greater L.A. Auto Show.

“We know what the technology is. The only question is will the customer be prepared to pay for it? That will be the question.”

It is unclear how much the Tier II Bin 5 rules, set for 2007, will force Volkswagen to tack on to the already escalated price tag of its diesel cars in the U.S. A diesel Jetta sedan costs about $1,000 more than comparable gasoline versions.

Pischetsrieder says about 10% of Volkswagen vehicles sold in the U.S. are equipped with diesel engines.

During his speech, Pischetsrieder reiterated his belief that diesel engines are the best solution available to improve fuel economy at no performance penalty for consumers.

He says particulate filters, oxides of nitrogen traps and higher-pressure ignition will be influential in readying the company’s U.S.-specification diesel engines for future regulations.