The Smell of Diesel Is Back in the Air

Peppier engines are U.S.-bound -- but they may be a hard sell

When Americans talk about diesel cars, it's usually to complain. Michael Logue, 39, an IBM engineer, recalls the ritual, back in the early '80s, of starting his parents' 1972 diesel-powered Mercedes-Benz 220: pull a dashboard switch, wait a couple of minutes for the glow plugs to light up, start the engine -- and then get a sluggish ride in a noisy, smoke-spewing car. "You had to floor it to accelerate," says Logue. So for Christmas, 1982, he gave his parents a fitting vanity plate: REAL SLO.

That neatly sums up why diesel cars have just about disappeared in the U.S. Their share of the car market has dwindled from about 6% in 1981 to less than 0.5%. The decline was hastened by Detroit's last attempt at making a diesel engine for cars, a poorly received General Motors Corp. effort in the 1980s.

Despite that notoriety, two big German-based auto makers are set to offer U.S. buyers versions of popular cars with new, high-mileage diesel engines that are a vast improvement over the models of a generation ago. This fall, Volkswagen, which sells over 30,000 diesel Jettas, Golfs, and Beetles each year in the U.S., will add a diesel Passat. And next year, DaimlerChrysler's Chrysler Group introduces a diesel-powered Jeep Liberty, while Mercedes-Benz will offer a diesel E-Class. Those models are now successful in Europe, where diesel has 40% of the car market.

But the Germans will face a tough sell convincing America that it should reconsider diesel. For one thing, gas costs far less stateside than in Europe, making it less likely that buyers will fork out as much as $1,500 extra for a diesel. And even though the newest diesels are cleaner than the ones remembered by Logue, they will soon face even tougher emissions standards.

The auto makers think they can succeed by targeting an informed and upscale audience intrigued by the technology and fuel efficiency of the new diesels. And since they pledge to meet the tighter emissions standards, they figure they can also pitch diesels as environmentally friendly. DaimlerChrysler and Volkswagen hope to sell about 50,000 diesel cars here each year. In an 8-million-car market, that's not a lot. But the Germans are betting that down the road they can establish diesels as an alternative to Japan's fuel-efficient hybrids -- cars that run on both gasoline and clean electric engines -- in an expanding market for high-mileage vehicles.

The Germans will hang much of their argument for diesel on the latest advances in technology. The new diesels can get up to 40% better mileage than gas-powered cars, their engines are quieter, and they pack more torque, or pulling power, at low speeds. That means zippy acceleration when the light turns green and less strain on cars with boats or trailers in tow -- all features U.S. drivers like. Says Chrysler Group CEO Dieter Zetsche: "This is diesel country. People just don't know it."

Problem is, they may never find out if carmakers don't resolve diesel's lingering pollution problems. Diesels emit fewer greenhouse gases than gas engines but more smog-producing nitrogen oxides and particulates, which may cause cancer. Next year, the U.S. Environmental Protection Agency will start phasing in rules cutting nitrogen oxide emissions 77%, on average, by 2007. DaimlerChrysler and VW say they'll meet the standards. But California will adopt even stricter rules in 2004; diesels may not be sold there.

Some environmentalists contend that there are better choices than even cleaner diesels. "If you spend enough, you can improve diesel," says Dan Becker, who heads up the Sierra Club's global warming initiative. "But at that point, you may as well build hybrids."

That's not what the Germans had in mind. They're counting on better engines and new rules that will force refiners to offer cleaner-burning diesel fuel in 2006. "That's when we'll start seeing really clean diesels," says Jeffrey R. Holmstead, assistant admin- istrator for the EPA's Office of Air & Radiation.

By then, VW and DaimlerChrysler may have company. Ford Motor Co. says it is considering a diesel-powered Focus, its popular compact, for the U.S. For now, however, it's the Germans who are staking their claim to lead a diesel revival -- and erase years of bad memories for American drivers.

By Christine Tierney, with David Welch, in Detroit

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