BMW, Audi prep more diesel models for U.S.

NEW YORK -- Volkswagen AG's Audi brand and BMW AG are expanding their diesel lineups in the United States as consumers are drawn by the performance and as a way to counter rising gasoline prices.

BMW is introducing diesel versions of its 3 Series and 5 Series this year, Ludwig Willisch, BMW's chief executive for North America, said in an interview at the New York auto show.

BMW plans to offer diesel engines in almost all its model lines in the next five years, he said.

Audi, which sells diesel versions of the A3 hatchback, A8 sedan and Q7 SUV, will introduce diesel variants of the A6 and A7 sedans and Q5 SUV for the 2014 model year, said Scott Keogh, the automaker's U.S. chief.

Makers of luxury vehicles, like other automakers, are under U.S. regulatory pressure to double their corporate average fuel economy, known as CAFE, to 54.5 miles (88 kilometers) per gallon by 2025.

"As luxury and non-luxury manufacturers struggle to reach mileage standards, diesel has emerged as one of the preferred technologies," said Alec Gutierrez, senior analyst from Kelley Blue Book. "Especially in luxury cars where customers don't want to sacrifice performance and hybrids haven't taken off."

'Convincing proposition'

BMW is expanding the lineup based on sales of the diesel version of its X5 SUV, currently the only model for which it offers a diesel engine, Willisch said.

Every fourth X5 sold in the United States is a diesel, and when gasoline prices spike, that can increase to every third, he said.

"It is a very convincing proposition and I don't know why it shouldn't work in the U.S.," Willisch said. "It's range, fuel economy, torque. That all is superior to a gas engine."

About half the A3 hatchbacks Audi sells in the United States and about 36 percent of the Q7 are diesels while take rates for the sedans should be closer to 15 percent, Keogh said.

"We see that as being very successful and that's why we're bringing more of them," Keogh said.

Diesels permit luxury buyers to obtain 25 percent to 30 percent better fuel efficiency while maintaining power and performance, said Rebecca Lindland, an automotive consultant with Rebel Three Media & Consultants in Cos Cob, Connecticut.

"There's only so much downsizing a luxury buyer is going to tolerate," Lindland said. "You want me to spend $40,000 on a three-cylinder engine when I can spend $40,000 on a diesel?"

Source : Auto News