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Published: Saturday, 8/7/2004

Jeep diesels a hot commodity

BLOOMBERG NEWS SERVICE

DaimlerChrysler AG's Chrysler may run out of engines for its diesel-powered Jeep Liberty sport-utility vehicle based on interest the light truck is generating among prospective U.S. buyers, a top Chrysler marketing official said yesterday.

Chrysler expects to sell 5,000 Liberty diesels in the United States next year after introducing it in 2005's first quarter. So far, the company has received at least 12,000 requests for information about the vehicle that is made in Toledo, said Jeff Bell, the executive in charge of advertising for Jeep and Chrysler-brand vehicles.

"Hand-raisers so far have been more than twice what we planned to sell," he said.

The SUV represents Chrysler's bet that buyers seeking better fuel economy amid record gasoline prices will prefer diesels to gasoline-electric hybrids from Toyota Motor Corp. and Ford Motor Co. Ford will start selling a hybrid version of its Escape small SUV in October.

Crude oil rose to a record yesterday amid concern about supply disruptions. The price is heading for its sixth weekly gain, surging 19 percent in that period.

Chrysler, the third-largest U.S. automaker, has the capacity to make a total of 50,000 diesel-powered Libertys for the United States and Europe next year, 45,000 of which it expects to sell in Europe, Mr. Bell said. Most Jeep-brand U.S. advertising will focus on the diesel-powered Liberty beginning in January and that may increase interest, Mr. Bell said.

Diesels get 30 percent to 40 percent better fuel economy than gasoline vehicles. Automakers are under regulatory pressure to boost fuel economy, and more U.S. demand for diesels would help automakers such as DaimlerChrysler spread costs for diesel-related investments in Europe.

Liberty, which is called Cherokee in Europe, uses an Italian-built 2.8-liter engine from Stuttgart, Germany-based DaimlerChrysler's Detroit Diesel unit.

The automaker has not yet studied what it would have to do to get more than 50,000 engines, he said.



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