(Updates with VW comments in the 16th paragraph.)
Feb. 7 (Bloomberg) -- General Motors Co., dueling with Volkswagen AG to be the world’s second-best selling automaker behind Toyota Motor Corp., today introduced a diesel Chevrolet Cruze to go against VW’s Jetta in the U.S.
The diesel version of the compact sedan is one of 13 new Chevrolets that GM is bringing to the U.S. this year to refresh a lineup that’s grown stale since the company emerged from bankruptcy reorganization in 2009. The Detroit-based company, the top-seller in the U.S., lost 1.7 points of market share last year, the most of any automaker.
“We expect the Cruze to compete head-to-head with the German diesels, particularly the Volkswagen Jetta TDI,” Gary Altman, chief engineer for Chevrolet small cars, said this week before the show. “In fact, we expect to beat the Jetta in terms of price, features, range, even horsepower and torque.”
The diesel Cruze, starting at $25,695, is being shown today at the Chicago Auto Show, which is billed as North America’s largest, with more than 1 million square feet (92,900 square meters) of exhibits. Along with the Chevy, Toyota revealed its redesigned Tundra full-size pickup and Chrysler Group LLC displayed its Ram ProMaster full-size commercial van, which is based on majority owner Fiat SpA’s Ducato.
While the share of diesel sales in 2012 in the U.S. was 3.1 percent, much of which was from trucks, that may increase to 7.7 percent in 2018, according to researcher LMC Automotive.
“You’re going to see more diesel action this year and into the subsequent years as more of the automakers are going to gravitate to diesel as a way to very quickly and easily up their CAFE numbers,” Bill Visnic, an industry analyst with Edmunds, said in an interview.
A diesel engine can improve a car’s fuel efficiency by 15 percent or more, he said, improving an automaker’s corporate average fuel economy rating by U.S. regulators.
GM expects diesels to make up about 10 percent of Cruze deliveries in the U.S., Don Johnson, head of Chevrolet sales, told reporters this month. GM said it hasn’t sold a diesel car in the U.S. since the 1986 Chevrolet Chevette.
“Quite frankly, it’s been a while since we’ve been out there with a diesel passenger car. So, we’ll see,” he said. “I think success for us is going to be establishing Chevrolet as a technology leader that can offer a vehicle like that in the U.S. market when many other competitors don’t.”
GM expects sales of the diesel version, which starts arriving at showrooms in 13 cities at the end of the second quarter, will be incremental and help attract new customers to Cruze, Cristi Landy, director of Chevrolet small car and electrified vehicle marketing, said today in an interview.
“The diesel buyer really kind of thinks he’s smarter than the average bear,” she said. “They kind of embrace the technology. They really feel like they have the right solution. They appreciate the range, the highway fuel economy, and that they don’t have to give up performance; they get performance.”
While a Cruze diesel may be small volume for a company that sold more than 9.2 million vehicles last year, it’s another battlefield in the three-way fight among GM, Toyota and VW for global dominance.
Toyota, helped by a strong recovery following production problems in 2011 tied to natural disasters, overtook GM last year to again become the best-selling automaker in the world. GM finished No. 2, outselling VW by 130,000 deliveries. Wolfsburg, Germany-based VW aims to become the world’s biggest by 2018.
VW has seen U.S. success in diesel offerings among its cars, including the Jetta compact sedan. About 20 percent of VW’s 146,478 Jetta deliveries last year in the U.S. were diesel, according to the company. The 2013 Jetta diesel starts at $23,850, according to VW. That’s a premium on the $17,515 non- diesel version, including destination charge, according to VW’s website.
The Jetta diesel with a manual transmission has 140 horsepower and 236 pound-feet of torque, according to VW.
GM’s entry will help get more U.S. consumers thinking about diesel, Rainer Michel, vice president of product marketing and strategy for Volkswagen of America, said today in an interview at the Chicago show.
“The other companies help us with the awareness of our diesel,” he said.
About 21 percent of VW’s U.S. sales last year were diesel vehicles, the company has said. Within less than five years, Michel said, he believes it will reach 30 percent, noting that all new vehicles being introduced will have diesel options. “I expect we can do better,” he said.
U.S. sales of the Cruze rose 2.6 percent last year to 237,758. The gasoline-powered car starts at $17,130, according to Chevrolet’s website, and, at best, can achieve 38 miles (61 kilometers) per gallon on the highway, U.S. Environmental Protection Agency said. An Eco version of the Cruze, which starts at $20,490, can get 42 mpg on the highway, according to the EPA, which gives the same rating to the diesel Jetta.
The new Cruze diesel with a 2-liter engine is expected to get 42 mpg on the highway, Altman said. GM expects the car to produce 148 horsepower and 250 pound-feet of torque, he said.
The powertrain has a special turbo feature that creates a 10 second boost of pressure to increase torque to 280 pound-feet for an added burst of acceleration, he said.
“The Cruze turbo diesel is the cleanest operating diesel engine ever produced by General Motors,” Altman said. “We leveraged our global engineering expertise to take a great diesel engine from Europe and improve it to meet the stringent U.S. standards.”
The Cruze was GM’s best-selling car in the world last year with 739,000 deliveries, according to the company. Forty percent of all Cruzes sold in Europe were equipped with diesels, Altman said. GM makes about 500,000 small diesel engines around the world each year for its vehicles.
Price and fuel efficiency are top priorities for Jared Haase, a car shopper who lives in the New York City area. He wants to find an affordable diesel crossover vehicle or perhaps a car, he said.
“I’m in my late 20s, so I’m looking for something economical, yet sporty,” he said by e-mail. He’s attracted to diesels’ fuel economy and high-torque driving experience. “I would likely never buy a Prius or another hybrid -- too many components, too many things that can break,” while the price premium is similar or even more, he said.
He’s optimistic about a diesel version of the Mazda6, which has been promised for the U.S. this year. VW’s offerings are out of his price range, he said. He’s read about the upcoming Chevy Cruze diesel.
“I like some of the cars in Chevrolet’s lineup, although I am a little wary of the Cruze, given its heavier curb weight,” he said. “The fuel-savings payoff (versus the existing gasoline engine) may not be as great when factoring in the weight of the car and the premium one has to pay at the pump for the diesel option. It also takes very little to option a Cruze to over $20K, which is a lot for a small car.”
--Editors: Jamie Butters, Bill Koenig.