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Acceleration, not speed, behind BMW diesel launch in U.S.

A BMW logo is seen on the rim of a BMW 650i xDrive car on media day at the Paris Mondial de l'Automobile, September 28, 2012. REUTERS/Christ
A BMW logo is seen on the rim of a BMW 650i xDrive car on media day at the Paris Mondial de l'Automobile, September 28, 2012. REUTERS/Christ

By Christiaan Hetzner

WOODCLIFF LAKE, New Jersey (Reuters) - BMW has a message for the incorrigible speed freaks looking for a more politically correct set of wheels in this era of energy efficiency: switch to a diesel.

The German luxury carmaker is rolling out a new range of sporty new diesel sedans in the United States this year to complement its sole diesel on offer - the X5 xDrive 35d sport utility vehicle - and believes the hitherto unloved powertrain will find greater acceptance in an age of downsized engines.

Diesels boast roughly 25 percent improved fuel consumption versus conventional cars, but their renaissance in the U.S. market long prophesied by German automakers such as Volkswagen and Mercedes-Benz has been an uphill battle due to a poor image, higher fuel prices relative to gasoline and a spotty filling station infrastructure.

"The X5 diesel is selling like hot cakes, so we know from the X5 how strong customer acceptance can be as long as you have the right product," said Ludwig Willisch, president of BMW of North America, during an interview at its Woodcliff Lake headquarters on the outskirts of New York City.

"The next step then is launching a four-cylinder diesel in the 3 Series and a six-cylinder diesel in the 5 Series in the market this year," he continued, speaking prior to this week's North American auto show in Detroit.

Roughly a quarter of the 56,800 X5 SUVs that BMW sold last year were equipped with a diesel engine rather than a conventional gasoline engine, which Willisch said makes the SUV the second-best-selling diesel in the United States after the much cheaper Volkswagen Jetta TDI.

A German national, Willisch previously headed up the group's sales activities for Europe, where diesel penetration steadily rose from over 20 percent in 1997 to 56 percent last year, due partly to a more beneficial tax treatment in many countries.

Luxury carmakers like BMW also tend to be more dependent on diesels than their mass-market peers. Fuel bills would make the total cost of owning a large sedan or a heavy SUV much higher in Europe were the vehicles powered by gasoline. Two-thirds of BMW brand cars sold in Germany last year were diesels.

Diesels traditionally aren't found in high-revving sports cars because they already generate at lower engine revolutions the maximum amount of force they can apply to the wheels, or torque, which is so crucial to quick acceleration. Their power curve tends to drop the faster the engine runs, making diesels ideal for towing heavy loads.

Yet BMW for the first time last year rolled out its first diesel-powered line of tuned M performance cars such as the M550d to send a statement - diesels are every bit as sporty.

CONSTRAINED OPTIMISM

"Torque is especially important to Americans. Flat-out top speed doesn't really count anymore," Willisch said.

"So I cannot imagine that the advantages of a diesel in terms of both torque and fuel consumption will not find appeal with customers in the U.S."

Whereas half of the new cars in Europe run on diesel, Americans have long eschewed the alternative powertrain due to the widespread image that stuck from the 1970s of loud, smelly cars that often could not start in the cold, and when they did, clouds of black soot would belch out of the tailpipe.

Diesels are, however, often better equipped to handle the long commutes typically driven in America than the densely congested areas of Europe, where a gasoline-electric hybrid is often more suitable.

A Toyota <7203.T> Prius operates more efficiently in stop-and-go traffic, for example, since it depends on recouping kinetic energy otherwise lost when the brakes are applied.

Mercedes currently plans to add diesel versions of the C-Class sedan and GLK mid-size SUV in addition to those on offer for its larger M-Class and GL-Class SUVs.

Despite its expansion plans, sales of Mercedes BlueTEC diesels rose 7.4 percent to just 15,416 vehicles last year, lagging the brand's overall growth rate in the U.S. market. VW saw its U.S. penetration rate of diesels drop one full percentage point to 20.6 percent last year.

In an attempt to rebrand the technology, the industry has taken to calling them "Clean Diesels". Sales did increase some 25 percent in 2012 in the United States, but this still lagged the near-68 percent gain in hybrid sales, according to data cited by industry group Diesel Technology Forum.

In an interview on Tuesday, the U.S. head of Mercedes said he had only a "constrained optimistic" view on diesels.

"The U.S. market is just not going to develop like Canada or Europe, period. There is nothing on the horizon that would indicate any strong movement either from a supply or a consumer demand standpoint that is going to move us towards diesel," Stephen Cannon told Reuters.

(Reporting by Christiaan Hetzner; Editing by Dale Hudson)

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