The German Diesel Party – Is Anyone Coming?

By Ian Grasso
03.21.2008

I have previously written of my skepticism of diesel in the United States, and I can say with confidence that attending the New York Auto Show has done nothing to make me more optimistic of its potential as an alternative fuel in the United States. However, the three largest German Automakers are pushing diesel, especially urea-catalysed diesel, in a big way here. While diesel has tangible advantages when compared to gasoline, time will certainly tell if Mercedes, BMW, and Volkswagen can make any headway with their offerings.

Mercedes previewed their Blutec technology in the 2009 M-class with an odd and slightly disturbing faux political rally on Wednesday. Stuttgart-based engineers developed Blutec and its urea-based AdBlue catalyzing agent, their trademark for Selective Catalytic Reduction (SCR). Therefore, other car makers wishing to use the technology must pay Mercedes a licensing fee.
Dr. Thomas Weber, a Mercedes executive straight off a Lufthansa flight from the Fatherland, spoke and then transformed into an enthusiastic MC for some good old-fashioned balloon and confetti showers straight out of a Republican Presidential convention. Unfortunately, the young product people waving signs proclaiming the superiority of Bluetec were less convincing as patriots of automotive technology.


After the confetti and balloons dispersed and I received my Mercedes “campaign pin” (which was deposited in my souvenir bag), I went in to snap the topmost photo, which hopefully for Mercedes does not signal the interest of future M-class buyers in the Blutec option. The technology will initially be available in the Stuttgart based companies SUV line.

Mercedes stated goal is that 20% of their cars sold in the United States will be diesel, although right now the number hovers somewhere beneath 5% as their current engines are not 50-state compliant. Blutec is a fantastic technology, and Mercedes claims it is the cleanest diesel in the world. But it seems that people soon forget about their environmental impact when facing high prices at the pump, and diesel SCR technology is especially expensive right now.


Right next door at the BMW podium there was a 3-series sedan with similar technology, but it was little discussed by BMW North America CEO Tom Purves during his press conference other than as a slight dig at Mercedes. He said that customers “could also get the cleanest diesel from BMW, but you get performance too.” This comment references the fact that while the while the technologies from Mercedes and BMW are both sourced from the former’s patient, the latter is choosing to implement the technology in a sports sedan instead of its line of SUV’s. BMW will use hybrid technology in its upcoming X6 “Sports Activity Vehicle.”

I think BMW might be more successful with the 335i “BluePerformance” twin-turbo diesel shown above. The reason? Blistering performance. The oil-burning 3 series will produce as much torque as the gas-fired V-12 in the much larger 760iL and have a 500 mile range, according to Mr. Purves. This car will be a performance enthusiasts dream, and thus will be able to be sold for more of a premium and generate more excitement with both the public and automotive journalists than Mercedes’ Blutec SUV’s.


Failing in its effort not to be undone by its German rivals was Volkswagen. Languishing on the sparsely traveled lower level of the show, this soon-to-arrive 2.0L TDI Jetta Wagon is Volkswagen’s hope for the suburban soccer moms of tomorrow.

Unlike the BMW and Mercedes offerings, Wolfsburg’s 50-state emissions compliant diesel uses a standard NOx converter instead of SCR. Volkswagen does have the rights to this technology and plans to implement it in its Audi Q7 SUV, however the small displacement and power output of the Jetta do not necessitate the technology. This keeps development and, hopefully, purchase prices lower.

Volkswagen and Mercedes, although using different technology, are both focused on the same market: the commuter who needs the superior high speed, long distance performance of diesel to make that long trip to work at a lower fuel cost. We will see if this customer base buys their argument and transitions to diesel. It seems doubtful, given the current economic situation, that this will happen in the short or even medium term.

On the other hand, BMW is focusing on its core market of the performance oriented driver less concerned with IKEA trips and hauling kids to soccer and lacrosse practice, and in my opinion will have some success if they can keep the diesel 3 series from having a stratospherically higher cost than the gas version.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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1 Comment

  1. Diesel has really got things stacked against it in America. Too bad it’s not the same situation here as it is in Europe, because we would see a explosion of diesel here. It just can’t do it here.

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