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DATE News (chronologically)
01/01/08
industry news
Big 3 finally get it - to go after diesel market
After we at AutoRacing1.com wrote numerous articles that the US automakers were missing the boat on diesel engines it is finally sinking in.

Recently passed energy legislation that mandates 40 percent fuel efficiency increases on automakers has them looking toward a technology that's existed for years -- diesel. General Motors Corp., Ford Motor Co. and Chrysler LLC have committed to a diesel option in the next generation of their light-duty pickups, which are the best-selling vehicles in each of their lineups. If all goes well and more consumers accept diesels as an option, the technology could expand beyond trucks. Adding diesels will help the automakers reach the fleet-wide, industry average of 35 miles per gallon signed into law by President Bush on Dec. 19. But they'll have to work hard at selling the public on diesel's benefits.

Diesel engines can I improve a vehicle's fuel efficiency 30 percent; the fuel is readily available and millions of people drive diesels daily. Diesel engines also have a decades-longer track record than hybrids and are the choice among about half of all European car buyers.

But, in the United States diesels haven't caught on, and account for only 3.2 percent of the domestic light vehicle market. That's due in large part to European emissions rules and a tax structure which favors diesels there. In the United States, until recently, diesel fuel refining rules made it hard to have a 50-state standard. But with consistency in low-sulfur diesel fuel regulations and the newly passed energy legislation, Detroit's automakers are making a push into the diesel market.

It's not an easy sell. U.S. diesel vehicles are not widely available, have had difficulty meeting emission standards, are more expensive and face the dated stigma of smelly, noisy, sooty engines of the 1970s and 1980s.

Chrysler's Jeep Grand Cherokee is the only model, outside of medium-duty pickups, with a diesel option among all three American automaker's lineups. And that vehicle can't be sold in California or the seven other states that have adopted stricter emissions standards than what's set by the federal government.

Experts foresee diesel growth

Diesel's prospects, however, appear poised to outpace its challenges in the coming years.

J.D. Power and Associates predicts the diesel market will more than double to 1.27 million units by 2012, and others in the industry expect diesel to make up 15 percent of the total automotive market within the decade.

"If we have to get 35 miles per gallon by 2020, we can't maintain the current makeup of the fleet," said Mike Omotoso, J.D.

Power's senior manager of global powertrain. "With continuing high gas prices, consumers are looking for vehicles with good fuel economy, and that's where diesel can deliver." Diesel technology is far from new. German engineer Rudolf Diesel patented his version of the powertrain in 1893. The basic difference between gasoline and diesel engines is that diesels don't have spark plugs to ignite the air-fuel mixture.

Diesel engines compress the mixture to the point where it combusts on its own. Diesel is a thicker, less refined petroleum product than gasoline, and contains more energy per gallon -- meaning you can drive further on diesel than on gas.

Like their hybrid cousins, diesel engines cost more than standard gas-fueled power plants. But despite the seasonal fluctuations in diesel fuel prices, the payoff for consumers may come sooner.

For a motorist who drives 12,000 miles per year, it would take fewer than four years for the $1,655 diesel option to pay for itself on the Jeep Grand Cherokee Limited -- assuming diesel and gas fuel prices average $3 per gallon. By comparison, hybrid premiums of about $5,000 take far longer to pay for themselves. Consumers must calculate if potentially higher fuel costs and a more expensive vehicle will be offset by better fuel economy. Forcing consumers to do that math is a significant barrier to the appeal of diesels, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

"The economics are harder to make sense," he said. "Are you willing to pay a couple of thousand dollars more for better fuel economy?"

Cole, however, expects diesel use to expand, especially among truck and SUV buyers, where gasoline fuel economy is worse but consumer demand is high. Diesel could let drivers achieve fuel economy gains without moving into a smaller car, said Christopher Qualters, director of diesel systems marketing at auto supplier Robert Bosch LLC. Bosch, a maker of diesel engine components and after treatments, predicts diesel will have a 15 percent stake in the U.S. market by 2015.

"Who wouldn't want to drive the same vehicle they have now, but get 30 percent better fuel economy?" he said. "You're not asking the driver to make a sacrifice."

Big Three's plans

Chrysler is pushing diesel as a fuel-saving alternative -- a lingering benefit of the automaker's former marriage with Daimler AG. Daimler provides the six-cylinder diesel engine for Grand Cherokees sold in the United States and provides engines for five models sold in Europe. Chrysler lowered the cost of the diesel $1,000 for its 2008 Grand Cherokees. The option ranges in price from $1,010 to $3,235, depending on trim level and whether the vehicle is four-wheel drive. "If it's priced right, we can sell diesel here," said Reg Modlin, Chrysler's director of environmental affairs. "Diesel can give you an immediate poke in fuel economy -- 20 to 40 percent. Not many technologies can deliver that today."  More at Detroit News

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