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Is There Space in Our Market for Chevy Cruze, Equinox Diesels?




A federal judge in San Francisco recently approved Volkswagen’s $14.7-billion Dieselgate settlement, some 13 months after the German value brand stopped selling TDI models in the United States. Meanwhile, even in Europe, where it takes incentives to keep diesel car sales high, electrification is starting to take hold. Paris even wants to ban diesels altogether.

So it seems fair to ask whether the diesel engine, as a mainstream powertrain choice, is over with in North America. For General Motors, the answer is a resounding “no.” Having achieved some success with a take-rate of more than 10 percent for the Chevrolet Colorado and GMC Canyon 2.8-liter I-4 turbodiesels, it’s expanding the diesel lineup to two of its most popular non-pickup models, the Chevy Cruze — both the sedan and the new hatchback — and the Equinox crossover/utility. The 2018 Chevrolet Equinox diesel comes first, with the redesigned compact crossover/utility expected early in calendar ’17. Cruze diesels launch later in the 2018 model year, beginning with the sedan, then the hatchback.

“Our plan was in place before September 2015,” GM’s global propulsion vice president, Dan Nicholson, explains. That’s when VW, the EPA, and the California Air Resources Board went public on the German automaker’s “cheater software” to meet emissions standards without expensive particulate emissions aftertreatment. There has been a lot of Chevy dealer interest in the diesel options, Nicholson says, especially for the Equinox.

“That segment really hasn’t had a diesel before,” Nicholson says, of the Equinox. “Being a bit bigger, heavier vehicle,” the diesel “makes more sense in an Equinox than in a Cruze.”

Wards Auto reported in July 2015 that GM engineers began work on the new diesel with the knowledge that it would be sold here. But Nicholson acknowledges that GM constantly re-evaluates such plans, and that it could have changed its strategy for the Cruze/Equinox diesels before announcing them.

Before Dieselgate, VW offered its 2.0-liter TDI in Golfs, Jettas, Passats, even Beetles, but not Tiguans. The Volkswagen Atlas midsize SUV was still nearly two years away. Adding diesel options to popular CUV models would go a long way toward helping automakers meet the 2025 Corporate Average Fuel Economy standard set at 54.5 mpg (but currently embroiled in a “mid-term review” controversy which has some arguing the number should be adjusted downward). GM says the Chevy Equinox 1.6-liter turbodiesel will achieve 40-mpg highway, a great number for a compact CUV. It won’t speculate on the Cruze’s diesel number quite yet, though a highway number of at least 45 mpg, and perhaps as high as 50 mpg seems plausible.

The 2014-15 Chevy Cruze diesel sedan, powered by a 2.0-liter engine, was EPA-rated 27/44 mpg, with the “44” number being most salient — diesels do their most efficient work on the highway after their turbos get them up to steady cruising speeds. Before VW was caught, owners found that their actual highway mileage often was higher than the EPA label number for their cars. We’ll find out next year whether the Equinox diesel can at least maintain whatever highway number the EPA attaches to its label, but efficiency-oriented Bowtie loyalists looking for the best combo will want a Bolt or Volt for city commuting and an Equinox or Cruze turbodiesel for longer, freeway trips.

Prior to installing the 1.6 CDTi in the Opel/Vauxhall Astra, GM launched the new diesel in the 2015 Opel/Vauxhall Zafira compact people-mover and ’15 Mokka (Chevy Trax/Buick Encore), so it will come to the U.S. market having been vetted for more than two years in Europe. Most importantly, Nicholson notes, these new diesels are built with selective catalyst reduction systems — after-treatment systems — “just like the Colorado” diesel.

The Chevy Equinox will mate the engine with a six-speed automatic, while the ’18 Cruze sedan and hatchback will offer the diesel with the choice of a six-speed manual (hooray! Expect the diesel-manual Cruze hatchback to sell by the dozens) or the upcoming nine-speed automatic. The automaker calls its 1.6 CDTi the “Whisper Diesel” for its low-noise characteristics, though Nicholson admits the engine’s vibration characteristics will better fit the expectations of the typical diesel enthusiast.

In Europe, the 1.6 CDTi is offered in 108 horsepower and 134 horsepower variations — you can be sure we’ll only get the 134 hp version, which will have a slightly different SAE-certified number. The engine’s maximum torque is a healthy 236 pound-feet, typical for turbodiesel fours. There’s also a BiTurbo Whisper Diesel in performance Opel/Vauxhall Astra models rated 158 horsepower, certain to spark speculation of a Cruze SS CDTi. [Vauxhall’s specifications for the 134-hp Astra Whisper Diesel lists a respectable 0-60 mph time of 9.0-seconds flat.]

With its aftertreatment system and two years’ real-world use in Europe, Whisper Diesel-equipped Chevy Equinoxes and Cruzes ought to find some success in the U.S. market, so long as VW’s Dieselgate doesn’t continue to tarnish the reputation of the engine type beyond affecting only the German brand. “Clean diesel” is nearly as controversial as “clean coal.”

Beside the GMC Canyon/Chevy Colorado, our diesel market consists mostly of heavy-duty pickup trucks, plus the Ram 1500, Jeep Grand Cherokee and various BMWs and Mercedes-Benz models. Mazda says it still plans to offer Skyactive diesel-powered models in the U.S., as soon as its engineers figure out how to meet emissions standards and the “Zoom-Zoom” customer expectations.

2016 Chevrolet Colorado Diesel front three quarter 04

2016 Chevrolet Colorado Diesel front three quarter 04

Mercedes has had significant diesel sales here since at least the early 1970s, and I don’t see that diminishing much, even as it adds electrified powertrains to more of its models. But with VW out indefinitely — out of the U.S. diesel market for good, I would bet — the Chevys represent the only brand that adds such a powertrain to popularly priced models, including sub-$30,000 Cruzes. Because diesel after-treatment systems can cost as much as a decent gasoline-hybrid system, the sticker price-bump typically is at least $3,000, which is a much bigger deal on a Cruze than on an E-Class.

On top of that, diesel owners must be given incentives to regularly bring in their cars and trucks in order to have the after-treatment fluid replaced, usually on the order of once every 12,000 miles. Typically, it’s folded into scheduled dealer maintenance, but what happens when the warranty miles are used up?

Then there’s the low price of oil, and the typically higher price for a gallon of diesel fuel versus a gallon of gas, which Nicholson acknowledges can make diesels a tough sell in our market.

After the Corporate Average Fuel Economy standards became law in the late 1970s, automakers often restricted supply of big engines and big vehicles when they weren’t selling enough fuel-efficient models. That won’t happen with these GM models, says Steve Majoros, marketing director for Chevrolet cars and crossovers.

“We can make this more about market demand and market penetration, rather than trying to force this on the market,” he says. Chevrolet sold about 6,000 Cruze diesels with the old 2.0-liter engine in 2014-15 “without doing any [advertising] at all.”

Even if gas prices remain dirt-cheap, I have no doubt that a big “40 mpg” plastered in the middle of Chevy Equinox ads, or possibly “50 mpg” in the Cruze diesel ads will draw at least 2- or 3 percent of those two models’ customers. That could be as much as 10,000 to 15,000 of the two models combined, based on last year’s sales. So if the Whisper Diesel take-rate is the same as the manual gearbox take-rate for most cars (when offered), the Chevy Equinox and Cruze will draw some of the diesel-faithful. But will they attract VW diesel buyers?

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November 3, 2016