Europe's New Diesel Cars in the Fast Lane

Differences highlighted between European and American approaches to future vehicles.

Published: 07-Mar-2003

GENEVA Chalk it up to the widening gap in the way Europeans and Americans look at the world.

Last week, General Motors brought its prototype of a hydrogen-powered car to the Geneva International Motor Show. The futuristic car, known as the Hy-wire, had just gotten a nice lift from President George W. Bush, who was photographed admiring it after announcing that the government would pour $1.7 billion into research using hydrogen as a replacement for petroleum. But in the salons of Geneva, the Hy-wire sat forlornly next to a prototype of a monstrous Cadillac with a 16-cylinder engine. The crowds all but ignored the car, preferring to swarm around the latest Mini, the plucky English carmaker owned by BMW of Germany.

What was the attraction? The new Mini has a diesel engine.

To be fair, the Mini is rolling out this summer, while the Hy-wire is merely a twinkle in the eye of automotive engineers. But that difference helps explain why the European auto executives in Geneva seemed notably less dazzled by a hydrogen future than their American counterparts.

They produce millions of diesel passenger cars, which they say deliver many of the economic and environmental benefits that hydrogen or hybrid engines will not deliver for at least a decade. "Why do we talk about hydrogen so much when the experts all agree we already have a good technology?" said Jens Neumann, the head of strategy and North American operations for Volkswagen.

About 40 percent of the VW cars sold in Europe use a diesel technology called turbo direct injection, which Neumann says is cleaner and more fuel-efficient than traditional diesel engines.

It also offers better driving performance than comparable gasoline engines, which may come as a revelation to many Americans, who think of diesel cars as noisy, smoky machines with all the agility of a tractor.

VW sells turbo-diesel versions of its Beetle and Jetta models in the United States, and plans to introduce a diesel Passat sedan. Neumann said he believed the proliferation of $2-a-gallon gasoline would help Volkswagen surmount the distaste of Americans for diesel cars.

"You can drive a Beetle from New York to Chicago with one fill-up, which is an exciting thing," he said.

European auto executives do not dispute the long-term potential of hydrogen as a replacement for petroleum. BMW, Mercedes-Benz and other makers have experimented with fuel cells and hybrid engines.

But they are skeptical of the sudden halo of publicity surrounding what they view as a science project. Some executives suggest Detroit is seizing on hydrogen to avoid the most obvious way to make its vehicles more fuel-efficient and environmentally friendly: build them smaller.

"People think this is just playing with the problem until the politicians in the United States have the courage to tax gasoline, which would shift demand to smaller cars," said Garel Rhys, director of the automotive industry research institute at Cardiff University in Wales.

At the moment, diesel fuel costs slightly more than gasoline in the United States. In Europe, it is generally cheaper.

This deprives European carmakers of one their major selling points for diesel.

Diesel faces other hurdles in the American market, not the least of which are environmental regulations. The United States limits the amount of particulates an exhaust system can emit. In 2007, the Environmental Protection Agency plans to tighten those limits dramatically.

Critics of diesel, in Europe and the United States, say it emits more particulates than gasoline. But while the campaign against diesel in Europe has failed to catch on, carmakers here know they must make their engines cleaner in order to comply with the coming American regulations.

Engineers are working to fit engines with filters to screen out many of these particulates. It is an expensive process, however, than can add $2,000 to the sticker price. Diesel cars already cost more than gas-powered cars, a disparity that is offset in Europe by the cheaper fuel.

Mercedes plans to introduce a diesel version of its popular E-class sedan in the United States next year. A spokesman acknowledged that pricing the car would be tricky, given the cost of the fuel.

"We know that customer acceptance of diesel in the U.S. is very low," said the spokesman, Johannes Reifenrath. "If we want to help build acceptance, we should want to help the price."

The situation in Europe could not be more different. More than 40 percent of all cars sold here have diesel engines. In France, the number is above 60 percent, and in Austria, 70 percent. Carmakers without a diesel in their lineup are severely constrained in terms of growth prospects.

Mini, the British maker of pint-sized cars, has been a marketing triumph under BMW. But when the parent company's head of marketing, Michael Ganal, rolled out the new Mini One D to a charmed crowd in Geneva, he made it sound like the key to Mini's survival in Europe.

Despite the obsession with diesel, BMW is determined to be a pioneer in hydrogen cars as well. Its emphasis, however, is on technologies that can be brought to the market as soon as possible.

The Munich-based company has built a version of its luxury 7-series sedan with an internal combustion engine that runs on liquid hydrogen or gasoline. GM's Hy-wire, by contrast, uses fuel cells that convert compressed hydrogen into electricity to power an electric engine.

Because the BMW can be filled up at regular gas stations, the company says it may be commercially viable by the end of the decade.

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