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MANCHESTER, Vermont - Mercedes-Benz's silent and strong 3-liter V6 diesel now is 50- state emissions-compliant and generates about 20 percent better fuel economy than a comparable gasoline engine. The problem for Mercedes: in many areas, diesel fuel is more 09 Mercedes GL 320 BlueTEC - 256.JPGthan 20 percent more expensive than gasoline - effectively erasing the advantage of the fuel-efficient engine on the buyer's bottom line.
Not to worry, said confident Mercedes executives and engineers at the worldwide launch of the '09 ML 320 BlueTec, GL 320 BlueTEC and R 320 BlueTEC here. The reason for their optimism is twofold: first, diesels still offer a financial gain. Second, they expect diesel fuel prices to retreat.
"Those looking at current fuel prices are jumping the gun," said Thomas Ruhl, director of development for the R-Class, SUV Hybrid and BlueTEC, while admitting the price of diesel fuel represents "a few dark clouds on the horizon."
But Ruhl and Stephen Cannon, MBUSA vice president, marketing, insist the launch of the three new diesel-powered SUVs in October won't be impacted by high diesel-fuel prices. They say, in fact, the company hasn't changed its volume forecast for the new diesel models, which flaunt the BlueTEC advanced emissions-reduction technology that finally allows the company to sell the diesel-powered vehicles in all 50 states.
Executives won't divulge projected sales volumes, but Cannon says sales of the current diesel-powered ML, GL and R, which lack the BlueTEC equipment and thus are available in just 44 states, are running 15 percent ahead of last year - defying the outsized run-up in fuel prices.
"No doubt, we are marketing into a bit of a headwind," admitted Cannon. But he said the company predicts diesel prices will retreat to a level approximately equal to premium-unleaded gasoline.
At that price, Cannon said the diesels will pay back their extra cost in about half the time the buyer of a hybrid-electric vehicle will achieve return on his investment. Even at current prices, Cannon says the diesel payback time is about two-thirds that of a hybrid.
Using its new AdBlue urea-injection system and an additional emissions catalyst, the '09 BlueTEC diesels finally can be sold in California, the nation's largest single auto market, as well as in New York, Pennsylvania and three other states that have adopted California's emissions standards. The existing non-BlueTEC diesels often account for as much as 21 percent of the ML-, GL- and R-Class mix, so Mercedes execs are hopeful nationwide availability will produce a marked uptick in diesel sales.
Ruhl says many often compare the price of diesel fuel to the price of regular unleaded gasoline, but the more accurate comparison is diesel to premium gasoline, as the most efficient gasoline engines - those with direct injection - typically require premium-quality gasoline.
Cannon says that even at current diesel-fuel prices, the BlueTEC diesels offer about a 15 percent cost savings. Fuel economy from the 3-liter V6 diesel is approximately 20 percent better: the ML 320 BlueTEC, for example, delivers 18 mpg in the city and 24 mpg highway, compared with 15 mpg city/20 mpg highway for the ML350 with a 3.5-liter gasoline V6.
Mercedes executives and engineers won't say when they expect diesel-fuel prices to begin to recede.
The GL 320 BlueTEC goes on sale nationwide in October. Mercedes will be the first to offer diesels with new urea-injection system to cut NOx emissions to levels that satisfy even California clean-freaks.
Mercedes Confident Fuel Prices Can't Scuttle New Diesels - Auto Observer
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