Europe’s greener cars show the way

Frankfurt Auto Show

Europe’s greener cars show the way

Talk of compact cars, diesel engines and hybrids dominates as U.S. gas prices rise.

By John McCormick / Special to The Detroit News

FRANKFURT, Germany — Around the halls of the sprawling Frankfurt auto show complex, home to the world’s largest auto show, compact cars rule and the talk is of hybrids and ultra-frugal diesel and gasoline engines.

Historically, Europe’s preference for small vehicles and fuel-efficient powertrains has not been shared by U.S. consumers. But that was before gas prices started to climb. Gas still only costs half as much in the United States as in parts of Europe, but now that Americans have seen prices top $3 a gallon, they may be ready to start taking efficient European-style vehicles and powertrains more seriously.

“I have been driving a two-seat Smart (the ForTwo) around New York,” says Han Tjan, director of corporate communications for DaimlerChrysler AG, “and people constantly stop me to ask about it, where they can buy one.”

Despite recent financial problems, the Smart division of DaimlerChrysler is still mulling a launch in the U.S. market with its tiny city car model. The company believes U.S. demand could reach 20,000 sales a year, Smart CEO Ulrich Walker said at the Frankfurt show.

Smart’s sister divisions, Mercedes-Benz and Auburn Hills-based Chrysler, also see sales opportunities with more fuel-efficient vehicles in the United States. The message is echoed by German automaker, Volkswagen AG, whose spokesman, Hans-Gerd Bode, said U.S. dealers are reporting increased customer interest in diesel models since Hurricane Katrina.

The promise of diesel powertrains is enormous, contends Dr. Bernd Bohr, chairman of Germany’s Bosch automotive group, a major supplier of diesel components in Europe, where diesel engines command approximately 50 percent of the passenger car market.

“We can make diesels as clean as gasoline engines in terms of emissions, and they have up to 30 percent better fuel efficiency,” Bohr said in Frankfurt, where the auto show, one of the major events in the automotive world, ends today.

Bosch is encouraged by the new U.S. energy bill, which gives diesels similar tax credits as hybrid vehicles to offset their higher purchase cost.

Of Detroit’s automakers, Chrysler is well-positioned to offer more diesel engines in its U.S. model lineup, thanks to the diesel expertise of its parent company. Jeep already offers the Liberty with a diesel, and there are hints from Chrysler management that the diesel-powered Chrysler 300 sedan, just launched in Europe, might come to the United States as well.

Outside of full-size trucks and heavy-duty vehicles, Ford Motor Co. and General Motors Corp. have not offered diesel engines in their U.S. car and truck models in recent years, although both companies have plenty of diesel options in Europe. Engine experts say the problem for Ford and GM is that their existing European diesels are not suitable for the larger passenger cars sold in the United States.

However, analysts say the companies are working on diesel engines for light-duty trucks such as the Ford Explorer and Chevrolet TrailBlazer.

At the luxury end of the market, diesels are immensely popular in Europe; Mercedes, for example, sells more diesel S-Class sedans than it does versions with gasoline engines. At Frankfurt, DaimlerChrysler’s research and development chief, Thomas Weber, stressed the company’s new goal of improving diesel and gasoline.

“For the drive concepts of the near future, the objective is to make petrol cars as efficient as diesels, and diesels as clean as petrol cars,” said Weber, as he presented two advanced hybrid versions — one diesel, one gasoline — of the new S-Class sedan.

Along with VW, Mercedes is the only brand offering diesel-engine passenger cars in the U.S. market. However, BMW AG is eager to join the club, once regulatory obstacles to diesel sales are eliminated in several key states, including California, New York and Massachusetts.

“The time is right to convince U.S. customers that diesel is fuel-efficient,” BMW CEO Helmut Panke told reporters.

“We believe that we should offer products that can be sold in all 50 states.”

Impressed by the gains that Japanese automakers have made with hybrid cars, Europe’s automakers are planning their own versions of gasoline-electric vehicles, such as the Porsche Cayenne. But privately, many executives pointed out that diesel technology is as fuel-efficient, and in some cases even more so, than more costly hybrid technology.

Hybrid vehicles now account for only around 1 percent of U.S. light vehicle sales, but the niche is expected to grow as more automakers, including General Motors Corp., DaimlerChrysler, Nissan Motor Co. and even Porsche add hybrid offerings to their model ranges.

Not all industry observers believe Americans will actually buy smaller, more economical vehicles, however.

“The recent spike in U.S. fuel prices due to Hurricane Katrina has made many Americans think more seriously about vehicle fuel efficiency,” said Lindsay Brooke, senior analyst at consulting firm CSM Worldwide in Farmington Hills. “But to merely consider buying a smaller, more fuel-efficient vehicle is quite different than actually purchasing it. Americans truly love larger vehicles, for many reasons, and I still do not believe that U.S. fuel prices have risen to and are sustained at a high enough level to cause a dramatic shift in vehicle buying.”

John McCormick is a columnist for Autos Insider and can be reached at jmccormick@detnews.com.

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