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Diamond Diesel Service, Inc., Auto Repair & Service - Diesel, Oakland, CA

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Back To Diesel Products>German diesel power gains favor with U.S. car buyers
By Chris Woodyard, USA TODAY Hybrids still get more buzz, but diesels are gaining favor with car buyers.

German automakers Mercedes-Benz, BMW, Volkswagen and Audi say they are encouraged by sales of the new breed of clean-diesel cars, crossovers and SUVs they are making for the U.S. Japan is poised to enter the market: Mazda announced recently that it will start selling its advanced diesel car in the U.S. in 2012.

Diesel engines offer up to 30% better mileage than comparable gas engines. But they were dismissed as smoky and noisy until the new generation of diesels went on sale in 2008. Sales also got a boost from a 2005 law that provides up to $1,800 in federal tax credits for diesel buyers.

A study by found that diesels pay for themselves faster than hybrids. Both diesels and hybrids cost more than their gas-engine counterparts. But diesels are cheaper than hybrids. That is somewhat offset by the higher cost of diesel fuel vs. gas. Tuesday, diesel averaged $3.053 a gallon nationally, 19.5 cents more than gasoline, according to auto club AAA. When fuel prices peaked in 2008, the spread was 73 cents.

"Fuel prices have been a bugaboo for diesels for the last 24 months, but things seem to be settling down now," says Allen Schaeffer, executive director of the Diesel Technology Forum, an advocacy group.

U.S. makers remain strong sellers of diesel trucks, but they don't sell diesel cars in the U.S. Sales of diesel cars have been strongest for Volkswagen. Now Audi, BMW and Mercedes-Benz are catching up.

"I was not happy at all in the beginning," says Friedrich Eichiner, chief financial officer for Munich-based BMW. March sales of the diesel X5 xDrive35d crossover and 335d increased fivefold from last year.

Other automakers report similar gains:

Volkswagen. Sales increased strongly in March for diesel versions of Jetta, Golf and the Touareg crossover from a year earlier. About 85% of the Jetta SportWagens sold now are diesels, and its sales increased 65% in March vs. March 2009.

•Audi. About half of A3 sedans sold in the U.S. now are diesels, and sales of both the gas and diesel versions of the car doubled in March compared with the same month last year. Four out of every 10 Q7 SUVs are now diesels.

Mercedes. In March, 10% of the ML-Class SUVs, 13% of the R-Class crossovers and 15% of the GL-Class SUVs sold were diesels. Mercedes is introducing a new clean-diesel version of the E-Class sedan in September.

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