Diesel-powered vehicles aiming to make a comeback

GM to let new Cruze roll onto market to challenge gas

Tim Gladieux, Volkswagen sales manager at Ed Schmidt Volkswagen, stands by a Beetle convertible. GM hasn’t sold a diesel-powered passenger car in more than 20 years, and Mr. Gladieux said the Volkswagen Passat TDI has sparked more interest in diesel.

THE BLADE/JETTA FRASER
Buy This Image

Tim Gladieux, Volkswagen sales manager at Ed Schmidt Volkswagen, stands by a Beetle convertible. GM hasn’t sold a diesel-powered passenger car in more than 20 years, and Mr. Gladieux said the Volkswagen Passat TDI has sparked more interest in diesel.

Greg Oehlers is eager to get his first shipment of the Chevrolet Cruze diesel, the newest version of the company’s top-selling car.

“I expect there to be a market for it,” said Mr. Oehlers, the new car sales manager at Dave White Chevrolet. “With people going to more environmentally sound choices, I see there being an interest in that.”

The diesel Cruze is a new direction for General Motors Co. — and for Detroit.

GM hasn’t sold a diesel-powered passenger car in the United States in more than 20 years. Many buyers today may not remember those cars, and that might be for the best. They weren’t very good.

The Cruze diesel seems to have better prospects. GM is taking its most popular car and adding a high-tech, turbocharged 2.0-liter clean diesel engine that pushes the sedan to an EPA-estimated 46 miles per gallon on the highway.

GM says the Cruze diesel will return the best highway fuel economy of any nonhybrid passenger car sold in the United States.

Mr. Oehlers expects Dave White Chevrolet to have the Cruze diesel in four to six weeks.

“It will allow GM to go head-to-head in a market they weren't even a player in,” Mr. Oehlers said.

Most diesel engines are significantly more efficient than similar-sized gasoline counterparts, on average delivering 30 to 35 percent better fuel efficiency. And they get better mileage without sacrificing power, especially low-end torque. That makes them appealing for people seeking more efficient transportation, especially with new regulations and clean-diesel technology that freed the engines from their reputation as smelly, noisy powerplants that billowed clouds of coal-black smoke.

At a little less than 3 percent of the market, diesel is still a small part of the overall U.S. light-vehicle market, but sales have been growing.

Registration data from research firm R.L. Polk & Co. show sales of diesel cars and light trucks rose 35 percent from 2008 to 2012. Looking only at cars, the growth was even more impressive. Polk said 13,909 diesel cars were registered in 2008. By 2012, that had jumped to 92,156 — an increase of 563 percent.

Industrywide sales of light vehicles rose about 10 percent from 2008 to 2012.

“That’s an indication that the technology has a place not only in the showrooms but in the driveways of American consumers,” said Allen Schaeffer, executive director of the Diesel Technology Forum, a nonprofit industry advocacy group. “Manufacturers are sort of getting the idea that more consumers in the U.S. are willing to invest in a diesel, and manufacturers are bringing more of them because of the more stringent fuel economy standards that are coming.”

Mr. Schaeffer said 22 diesel vehicles are available in the United States, including heavy-duty pickups. Within the next two years, he said he expects that number to more than double.

“I think once there are more choices for consumers they will begin looking at them in a more significant way. This year is kind of a watershed year as we have the first of the Big Three manufacturers to bring a diesel car to the U.S., which is the Chevy Cruze,” he said.

A Volkswagen Beetle convertible is one of several diesel-powered models at Ed Schmidt Volkswagen. Sales manager Tim Gladieux says customers have reported achieving 46 to 58 miles per gallon on the highway in the diesel Passat TDI.

Later this year, Mazda will begin selling a diesel version of its Mazda 6 sedan. Chrysler is also expanding its diesel offerings, with diesel versions of the Jeep Grand Cherokee and Ram 1500 coming later this year.

Right now, the diesel offerings that aren’t pickups come from German automakers. Volkswagen, particularly, has built a reputation on clean-diesel technology.

Tim Gladieux, sales manager at Ed Schmidt Volkswagen in Perrysburg, said the 2012 Passat TDI, a midsize U.S.-built diesel sedan, seemed to help spark some interest in diesel, and he said it helps that many drivers are reporting better-than-advertised fuel economy.

Mr. Gladieux said some customers have reported highway mileage of 46 to 58 miles per gallon in the Passat TDI. The EPA estimates highway fuel economy of 43 miles per gallon for a manual transmission Passat TDI. The most efficient gas-powered Passat is rated at 32 miles per gallon.

“Diesel has always been a very popular package when it comes to European car models, and Volkswagen is king over there,” Mr. Gladieux said. “It’s gained quite a bit of traction in the U.S. Hopefully this momentum keeps going.”

Like hybrids, diesel provides automakers another way to capture green-minded buyers while inching closer to upcoming fuel economy regulations. The U.S. government finalized standards last year that will require a fleet-wide average of 54.5 miles per gallon by 2025.

That’s part of the reason Chrysler is adding a diesel option to its Ram 1500 model for the 2014 model year.

Though many heavy-duty pickups have diesel options, Ram will be the first to offer a diesel in its light-duty pickup.

“I think one of the benefits of diesel clearly is fuel economy,” Reid Bigland, chief of sales for Chrysler Group LLC, recently told The Blade. “All the [manufacturers] are looking to improve their fuel economy. A, it’s good business, and B, ... to become regulatory complaint with CAFE standards and CO2 standards. Diesel’s a great way to get there.”

Chrysler hasn't released estimated fuel economy numbers for the diesel but says the truck will have the best-in-class fuel economy with power similar to the V-8 gas equipped version.

Chrysler is also bringing back a diesel option in the Jeep Grand Cherokee. The sport utility vehicle, which goes on sale in October, will get about 30 miles per gallon on the highway, a significant boost over its most efficient gas engine.

But it also will cost $4,500 more than the V-6 model.

That’s one of the inherent drawbacks to diesel. It’s costlier. On average, a diesel costs $2,000 to $5,000 more than a comparable gas version.

The fuel also costs more. According to the U.S. Energy Information Administration, the average price of a gallon of regular gasoline was $3.49 as of July 8. A gallon of diesel was $3.83 at the same point.

Industry people say that extra cost holds some people back. Still, a recent study from the University of Michigan’s Transportation Research Institute found diesels came out ahead in total cost of ownership.

Researchers looked at things including purchase price, fuel costs, maintenance, and resale value. The results varied by vehicle segment, but most savings were in the range of $2,000 to $6,000.

“If you’re willing to wait three or five years, you will get your money back and do better than get your money back,” said Bruce M. Belzowski, one of the study’s authors.

Still, it remains to be seen where diesels will fit into the future of the industry. Mr. Schaeffer believes by 2020, the market penetration for diesels could double or even triple, perhaps making up 9 percent of the U.S. market.

Polk analyst Tom Libby said it’s possible that diesel’s share could go up a bit as more diesels come to the United States from Europe. He also said diesel sales could rise if more manufacturers include it as an option on high-volume vehicles such as the Cruze. The price relationship between regular gas and diesel also is likely to have an effect.

Still, Polk’s analysts do not expect diesel to gain a large share of the market.

Interestingly, Polk’s data show that hybrids and diesels have a nearly identical market share right now, at about 3 percent.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.