GM Shows Off Coming Diesel-Power Small SUV
September 24 2016 - 5:59AM
Dow Jones News
By Mike Colias
General Motors Co. plans to expand the U.S. availability of
diesel engines in its Chevrolet cars and light trucks despite a
diminished outlook for diesel vehicles overall in the wake of
Volkswagen AG's emissions-cheating scandal.
GM said it would offer a diesel option with the 2018 model
Chevrolet Equinox, its best-selling small sport-utility vehicle
that is being overhauled amid booming demand for SUVs. The new
Equinox will compete with Ford Motor Co.'s Escape and Honda Motor
Co.'s CRV, and will be available at dealers early next year.
The No.1 U.S. auto maker in terms of sales also plans to offer
diesel engines on its Chevrolet Cruze small car next year. Prices
for the new vehicles will be disclosed closer to first deliveries,
the company said.
Likely to only represent a modest percentage of total Equinox or
Cruze sales in the U.S., GM's bet on diesel comes after Volkswagen
tried for years to get Americans to buy into the technology, which
is more fuel efficient than gasoline. Volkswagen's effort
collapsed, however, when the company admitted its diesel vehicles
emitted up to 40 times their allowed pollution and that the company
lied to regulators about emissions.
Most auto makers offer hybrid-electric technology or
turbocharging as a fuel-efficient alternative to conventional
gasoline engines.
Diesel engines are popular for brawny pickups and big commercial
trucks due to fuel savings, but it is a niche among U.S. car
buyers. Diesels accounted for less than 1% of the nation's car and
SUV sales before Volkswagen pulled diesels from the market last
September, according to data provider WardsAuto.com.
Volkswagen accounted for the bulk of diesel-vehicle sales for
the passenger car market, amassing a loyal fan base due to peppy
acceleration and good fuel economy. But diesels cost more to buy
upfront, and a lack of diesel pumps at many filling stations has
kept a lid on demand.
GM hopes to fill a niche in the U.S. vacated by its German
rival's pullback. And Chevrolet last year added a diesel-engine
option to its Colorado midsize pickup that has drawn favorable
reviews from car critics, emboldening GM to expand its diesel
offerings.
"It's only been since the VW challenges that people have been
sort of scratching their heads a little bit" about diesels, GM
North America President Alan Batey said in an interview. "But we've
been absolutely thrilled with how they've taken off for us."
GM sells diesels in Europe in higher volume, helping pave the
way for American executives to offer them as an option in the
U.S.
Even in Europe where diesels account for about half of car
sales, however, analysts expect the technology to eventually
decline. A June study by AlixPartners LLP, a consulting firm,
predicts diesel car sales will fall to 9% by 2030 as electric
vehicles and hybrids become more affordable. Gasoline models will
also decline, but not as sharply, the firm predicts.
GM will rely on several technologies to meet toughening
fuel-economy regulations, including plug-in hybrid Chevrolet Volt
and the long-range and relatively cheap electric car, the Bolt.
Still, the diesel Equinox should offer a valuable marketing
claim: expected 40 miles-a-gallon in highway driving. And it
signals that GM has several solutions on the fuel economy front, an
important message for company that was nudged into bankruptcy in
2009 partly because spiking gas prices hurt demand for its
truck-heavy lineup.
"Nobody will be able to say GM doesn't have its bases covered if
fuel prices go up again," said Dave Sullivan, an analyst at
research firm AutoPacific Inc. "It's a good story to tell."
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
September 24, 2016 05:44 ET (09:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Mar 2024 to Apr 2024
General Motors (NYSE:GM)
Historical Stock Chart
From Apr 2023 to Apr 2024