Jeep hopes diesel Liberty wins over skeptical buyers

DaimlerChrysler AG's Chrysler Group this month began shipping a diesel engine version of its Jeep Liberty sport utility vehicle to dealers, squeezing another model into a busy product year and launching an experiment to test U.S. car buyers' interest in diesels.
The Liberty is the first midsize SUV in the United States with a diesel engine, and hits the market at a time when high gasoline prices are spurring drivers to consider vehicles with better fuel economy.

But while diesels offer better fuel efficiency than gasoline engines and power nearly half of the vehicles on the road in Europe, they still face many hurdles in this country.

Some U.S. states, for instance, do not allow them to be sold because of emissions concerns, and many consumers still have bad memories of noisy and smelly diesels of the past, even though modern diesels are vastly improved.

That's why Chrysler has modest goals for Jeep Liberty diesel, projecting to sell about 5,000 next year.

But the automaker says early interest in the SUV has been very strong -- 50,000 consumers have indicated interested in the diesel Liberty -- and could spur the company to produce more.

"We are pleased with the initial response," said Jeff Bell, vice president of Jeep marketing. "But let's be frank; let's see where the rubber meets the road."

In the race to build more fuel-efficient cars and trucks, Honda Motor Co. and Toyota Motor Co.p. have gotten credit for being the leading innovators, offering the first gasoline-electric "hybrid" engines, which deliver up to 60 miles to the gallon. Ford Motor Co. launched a hybrid engine Escape SUV last fall, and Chrysler and General Motors Corp. this month announced a partnership to codevelop hybrid engines for upcoming models.

But Chrysler says diesels, which offer about 30 percent higher mileage than gasoline engines, will have a place alongside hybrids on U.S. roads until automakers master hydrogen power, which is not expected for at least 10 years.

Auto industry forecaster J.D. Power and Associates predicts diesels will reach 1 million, or about 6 percent of U.S. auto sales by 2009, up from 450,000, or 2.5 percent today. Hybrids, meanwhile, will tally 506,000 sales in 2009 for slightly less than 3 percent of the market.

"The reason we see diesels becoming more popular than hybrid vehicles is that consumers are more familiar with the technology, believe in the reliability of diesel technology and are aware of the fuel efficiency," said John Tews, a J.D. Power spokesman.

A government mandate calling for the production of low-sulfur diesel fuel by the fall of 2006, which will reduce the smog-forming emissions from diesel engines, also is expected to entice more buyers.

Yet U.S. consumers will need convincing that modern diesels are not the loud, stinky smoke-belchers of the 1970s.

"It's a huge PR challenge because of what the domestics did the first time out with diesels," said Jim Sanfilippo, auto analyst with AMCI Inc. in Detroit.

Americans rushed to buy diesels in the 1970s when oil shortages sent gasoline prices sky-high. But diesels quickly earned a bad reputation for being sluggish starters with poor performance and smelly fumes, and by the early 1990s, few were on sale in the United States.

Germany's Volkswagen AG never pulled out and now offers all U.S. models with a diesel engine, except its Phaeton luxury sedan, and is seeing diesel sales grow.

This spring, after sidelining U.S. diesels several years ago, Mercedes-Benz iintroduced the diesel-powered E320 CDI sedan, and Detroit automakers offer diesels in large pickups.

In anticipation of selling Liberty diesel, Chrysler is becoming well-rehearsed at shooting down objections to diesel before they start. The company says Liberty's 2.8-liter turbo diesel, built by Europe's VM Motori, has 60 percent less carbon dioxide emissions than diesels of 20 years ago, that noise-dampeners help silence its engine and that new ceramic "smart" plugs start the car immediately without the 10-second warm-up needed on old diesels.

Yet five states -- California, New York, Massachusetts, Vermont and Maine -- will still not allow Liberty diesel to be sold because even modern diesels emit pollutants that are smog-producing and potentially carcinogenic.

Liberty diesels began trickling into dealerships this month, but Chrysler will not start advertising the vehicles until March or April, when more models are on the ground, Bell said.

A multimedia advertising campaign will mainly highlight the vehicle's 500-mile range on a single tank of fuel, compared with about 325 miles on the gas-powered Liberty. Marketing will also tout the model's 5,000-pound towing capacity, 160 horsepower and fuel economy of 22 miles per gallon in the city and 27 on the highway.

The messages have already reached Jay Williams, a 34-year-old electrical engineer from Skokie, Ill, who ordered a Liberty diesel early this month and is awaiting delivery. Even though he has never driven or seen a Liberty diesel in person, Williams has done extensive research on the Internet and said the vehicle's towing power and fuel economy were enough to sell him. "I'm putting a lot of hope that this will be the right vehicle for me," he said.

But Chrysler dealers such as Dan Frost, president of Southfield Chrysler Jeep, said there hasn't been much advance buzz . "There have been a few buffs in asking about it," he said, "but no interest from the general public."

Frost believes one big strike for diesels is that people don't know where to get diesel fuel or don't like the idea of having to fill up at a truck stop. The bigger price tag may also hurt, he said.

The 2005 Jeep Liberty diesel starts at $25,125. A similar Liberty with a gas engine begins under $23,000.

A recent rise in diesel fuel prices also may make diesel models less attractive to some consumers. On Thursday, the national average price of regular unleaded gasoline was $1.78 per gallon, while diesel was $2.05 per gallon, according to AAA.

But Sanfilippo believes the promise of better mileage and the threat of higher gasoline prices will push Americans to get over their hangups about diesel. He remembers being a naysayer before he bought a 1979 Volkswagen Rabbit with a diesel.

"There aren't too many people in the United States who have had the pleasure of having a car that gets 40 miles per gallon," he said. "But it's a nice feeling."