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Is it Time For a Return to Diesels?

Not long ago, there seemed to be little support to the idea of bringing diesel engines back to North America. The question no longer seems to be whether diesels are coming back, but how strong a return will they make.

Diesel engines have never been more popular in Europe. Vehicles powered by diesel engines accounted for about 40 percent of all sales in Europe in 2002. But in the United States, sales and production of diesel engines are pretty much non-existent. Not one of the Big 3 produces a diesel engine in the United States for commercial vehicles (though General Motors does have a majority stake in a joint venture with Isuzu that produces diesel engines in Ohio).

The only auto company producing commercial diesel engines in North America is Volkswagen, at the company’s plant in Puebla, Mexico. VW is also the only company selling cars with diesel engines in the United States. The only vehicles with diesel engines offered by the Big 3 in the United States are full-sized trucks and SUVS — for example, the Dodge Ram, Chevy Silverado and Ford F series trucks.

Europeans that come to the United States, such as those at DaimlerChrysler, wonder why we are so adverse to diesel technology. But Americans remember all too well the diesel engines that were foisted on the public 20 or so years ago. Many of those diesels were noisy, had trouble starting and sputtered in the cold, were less reliable and were not powerful enough for the big trucks and SUVs that now dominate the American landscape. However, diesel engines today are quieter, higher quality and more powerful than ever before.

Americans might get to find out how much improvement has occurred. DaimlerChrysler, which produces the PT Cruiser, the Jeep Grand Cherokee and Liberty models with diesel engines in Europe, plans to provide a diesel-powered Liberty to U.S. customers in 2004. And a diesel engine in Mercedes Eclass sedans will be available in the United States beginning with its 2004 models.

Volkswagen, which has a 10-cylinder diesel engine going into its new Touareg SUV in Europe, said it might sell the Touareg as well as an Audi Pikes Peak SUV with a diesel engine in the United States in 2005.

These new diesel-powered vehicles also will give automakers a chance to showcase the environmental advances of diesels. Though carbon dioxide emissions are much lower than those of gasoline engines, diesel engines still are considered by many in North America to be smoky and dirty alternatives to gas-powered engines. Environmentalists have been among the biggest opponents of diesels because of their harmful emissions, which have been linked to cancer. Both the state of California and the U.S. Environmental Protection Agency have labeled diesel exhaust a carcinogen.

But most of the diesel engines produced in Europe adhere to much stricter standards, which has led to a more than 20 percent reduction in diesel emissions. And even bigger reductions are on the way. Diesel engines also average about 15 percent better fuel economy over gasoline engines. With Americans increasingly worried about reliance on foreign oil, the fuel economy savings provided by diesel engines becomes even more significant.

Late in 2002, U.S. Rep. John Dingell, DMich., announced plans to introduce legislation that would provide tax credits for customers who buy vehicles with energy efficient, low-emission diesel engines. Government incentives are one of the biggest reasons why diesel engines are so popular in Europe.

Diesel fuel is cheaper than gasoline in Europe, mainly because diesel is taxed less than gasoline. Dingell’s bill would lower standards for sulfur content in diesel fuel, as well as provide tax incentives for energy companies that produce cleaner diesel fuel.

Diesel engines are more costly to manufacture. But costs will come down as volumes increase, and manufacturers work to eliminate the added costs inherent in the fuel system and other diesel components.

All of these factors make diesels an increasingly popular choice for customers in Europe, and may make the timing right for the return of diesel engines in the United States.

Ron Harbour is president of Harbour and Associates, manufacturing consultants in Troy, Mich.

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