Americans Warm Up to Diesels But Balk at Price

Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – Frank Klegon quotes a recent survey that finds 23% of Americans say they’d consider purchasing a clean diesel-powered vehicle.

That’s double the percentage of a year-ago poll, which should perk up diesel proponents in the U.S.

“The bad news is that the consumer is only willing to pay about an additional $1,500 for diesel,” says Klegon, executive vice president-product development at Chrysler LLC. “That’s far less than the current actual cost, which can add more than $5,000 to each vehicle.”

Diesel advocates within the auto industry “still have a job to do educating consumers” on the engine’s costs and benefits, which include better fuel efficiency than gasoline mills, Klegon says at the Management Briefing Seminars here.

He doesn’t necessarily foresee a day when diesels are as popular in the U.S. as in Europe (where they account for about 50% of new-vehicle sales), but “they are starting to get some traction.”

The challenge is more on the business side, Klegon tells Ward’s. “Although a diesel is an inherently more expensive engine, it’s possible the cost could go down with technological advancements.”

And with the cost of gasoline engines potentially going up with addition of technology to achieve greater fuel efficiency, “there could be a convergence.”

The number of new diesel registrations in the U.S. has risen by 80% since 2000 to nearly 560,000 vehicles in 2006 – more than double the figure for hybrids, according to research by Robert Bosch GmbH, a major supplier of fuel-injection and engine-management systems for diesel vehicles, including the Dodge Ram pickup.

Frank Klegon

Helping diesel’s prospects in the U.S. is the availability, since October 2006, of clean diesel fuel with a sulfur content of 15 parts per million. This ultra-low sulfur fuel now is available across the U.S. at 42% of the country’s 76,000 diesel fueling stations, Bosch says.

Bosch executives also quote a Harris Interactive study that finds 31% of informed buyers would select a clean diesel for their next vehicle over other available powertrains, including hybrids. That’s considerably higher than the 23% figure Klegon quotes.

Klegon estimates that by the next decade diesels will power 15% of vehicles in the U.S., and hybrid-electric powertrains will power another 15%. The current penetration rate for diesels in the U.S. is 5%, compared with 1.5% for hybrids, according to Bosch.

“But that still leaves about 70% of the market with gasoline-powered engines,” he says.

On that front, Chrysler is in good shape, he says.

He cites the auto maker’s 2.4L 4-cyl. World Engine, equipped with dual variable valve timing. In the future, the mill could be adapted for gasoline direct-injection capability, he says.

The engine powers the Dodge Caliber and Avenger, Chrysler Sebring and Jeep Compass and Patriot.

Chrysler also is introducing vehicles with a new version of its E85 flex-fuel 4.7L V-8, with 5% better fuel economy, yet 30% more power than its predecessor, Klegon says.

Applications include the Chrysler Aspen, Dodge Dakota and Durango, as well as the Jeep Commander and Grand Cherokee.

In addition, Chrysler will offer an upgraded version of the 5.7L Hemi OHV V-8 for the ’09 model year.

Klegon says a key part of the auto maker’s $3 billion powertrain investment is an all-new family of V-6s that will be available in 2010.

Known as Phoenix, the engine family will feature Chrysler’s Multi-Displacement System (MDS), allowing it to operate on only three cylinders when less power is needed.

“We expect to see an across-the-board V-6 fuel efficiency improvement of 6% to 8%, as well as new levels of V-6 power and performance,” Klegon says.

Meanwhile, Chrysler’s Two-mode hybrid system (developed jointly with BMW AG and General Motors Corp.) will be available on the Dodge Durango and Chrysler Aspen SUVs next year, mated to the 5.7L Hemi with MDS.

And Dodge will introduce an all-new Cummins Inc. turbodiesel in light-duty pickups after 2009. It will provide up to 30% fuel-efficiency improvements and up to a 20% reduction in carbon dioxide emissions compared with an equivalent gasoline engine.

It also will meet emissions standards in all 50 states, as will the upcoming ’09 diesel-powered Jeep Grand Cherokee, Klegon says.

– with Tom Murphy

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