General Motors (NYSE: GM ) recently announced that it would begin offering its popular Chevy Cruze compact with an option rarely seen in cars outside of Europe – a diesel engine.
The Chevrolet Cruze Clean Turbo Diesel, as it's officially called, will go on sale in a few American cities this spring, ahead of a nationwide rollout in the fall.
Why would you want one? For starters, great mileage: It's EPA-rated for 46 miles per gallon on the highway, which GM says is better than any non-hybrid passenger car sold in America.
That's an eye-catching statement. But for those of a certain age, who remember the smoky and slow diesel cars sold here in the 1970s and 1980s, it might take more than a little persuading to put the new diesel Cruze on shopping lists.
Diesel cars are common in Europe, but still unusual here
Nearly everybody offers a big range of diesel car engines in Europe, where taxes on gasoline are high and diesel is a widely accepted alternative. Ford's (NYSE: F ) "Econetic" diesel Focus, which is said to have CO2 output comparable to a hybrid, is just one of a range of diesel cars offered by the Blue Oval in Europe – but not sold here.
Most of Ford's European competitors offer advanced diesel powertrains, and they sell well on the continent. They're good cars: Regulatory pressure and advances in technology mean that today's diesel engines have come a long way. Today's best diesel cars are strong and responsive – and most importantly, clean.
The oil-burning Cruze's engine is a 2.0-liter unit that uses the so-called "clean diesel" technology that has become ubiquitous in Europe. Clean diesel – essentially, advanced fuel injection coupled with turbocharging – eliminates much of the soot and smell that was associated with older diesel engines.
The Cruze's engine was developed in Europe (naturally), where about 40% of the Cruzes sold are equipped with diesel engines, and modified to meet U.S. regulations, which differ from the European Union's somewhat.
Despite the emphasis on "clean," performance doesn't suffer. GM says that the diesel Cruze will go from zero to 60 miles per hour in 8.6 seconds. That's hardly sports-car territory, but it beats Toyota's (NYSE: TM ) hybrid Prius, which takes 9.8 seconds to hit 60, Toyota says.
Diesel engines cost more to build than gas engines, and that means that the diesel Cruze isn't cheap at $25,695. But it's not bad given the mileage and performance. For someone with a long-haul highway commute, it might make a lot of sense.
So why aren't there more diesels here?
It's a good question. Among mass-market automakers, only Volkswagen (NASDAQOTH: VLKAY ) seems to sell significant quantities of diesel cars in the United States. VW says that cars powered by its clean diesel engines accounted for 22.6% of its U.S. sales in March, a 6.6% increase over last year. Maybe it's a German thing?
Of course, Ford sells plenty of cars in Germany, too, and GM even owns a German automaker – Opel. Ford COO Mark Fields said earlier this year that the company could "react very quickly" if diesels were to start to gain popularity in the U.S. Ford offers diesel engines in its heavy-duty F-Series pickups, but it hasn't yet announced plans to offer any of its clean diesel powertrains in passenger cars here in the U.S.
That's too bad. VW's ongoing success with diesel cars in the U.S. suggests that a market can be found for the new generation of high-tech oil-burners here. If GM's new diesel Cruze catches on, maybe more diesel cars will follow.
What do you think? Would you buy a diesel-powered car if more were available? Scroll down to leave a comment and let me know.
Is GM's stock a buy? Or is it best avoided?
Few companies lead to such strong feelings as General Motors. But ignoring emotions to make good investing decisions is hard. The Motley Fool's premium GM research service can help, by telling you the truth about GM's growth potential in coming years. (Hint: It's even bigger than you think. But it's not a sure thing, and we'll help you understand why.) It might help give you the courage to be greedy while others are still fearful, as well as a better understanding of the real risks facing General Motors. Just click here to get started now.