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The SUV aims to tap success of Jeep Liberty model, growing alternative fuel market.
Riding on the success of its Jeep Liberty diesel, the Chrysler Group plans to begin selling a diesel-powered Grand Cherokee SUV in the United States early next year.
Chrysler CEO and President Tom LaSorda will outline the plan today in a speech to business leaders at the Detroit Regional Chamber of Commerce Leadership Conference on Mackinac Island.
It's the latest push by automakers to offer alternative fuels in response to the rise in gasoline prices and concerns among new car and truck shoppers about fuel economy. Chrysler has become a major proponent of diesel engines and other fuels in the U.S. market.
"While diesel technology alone can help us become more energy independent, even bigger strides can be made by adding biofuels to the equation, such as biodiesel and ethanol," LaSorda said in a draft of his speech.
The new diesel engine uses advanced diesel technology developed by Chrysler's sister brand, luxury automaker Mercedes-Benz. The new 2007 Grand Cherokee's 3.0-liter common rail turbo diesel engine is based on Mercedes' Bluetech diesel engine technology.
"They're expected to show a diesel that is generally better than what people are used to," said Bruce Belzowski, an analyst with the University of Michigan's Office for the Study of Automotive Transportation. "(Chrysler) was pretty successful with the Liberty and the Europeans have been very strong on diesel."
The diesel Grand Cherokee, the biggest diesel SUV available in the U.S. market, will be assembled at Chrysler's Jefferson North Assembly plant in Detroit starting in the first quarter of 2007.
DaimlerChrysler's first application of the Bluetec diesel technology will be the six-cylinder Mercedes-Benz E30, which enters the market in the fall. The Jeep Liberty is equipped with a different diesel engine made by Italy's VM Motori.
But automakers face stringent federal government emission regulations for diesel engines even though they are more fuel-efficient than gasoline. And some municipalities have banned diesel engines because of harmful emissions.
The Grand Cherokee diesel will have an average fuel economy of 19 miles per gallon in city driving and 23 mpg on highways.
"You get better performance and 25 percent better fuel economy," said Mark Berube, senior manager of Jeep marketing. "From what we've seen in the marketplace out there, customers are ready for this technology."
The Grand Cherokee diesel will meet the Environmental Protection Agency's stricter 2007 emissions standards, but the SUV won't be sold in California, New York, Maine, Vermont or Connecticut, where environmental rules are even tighter.
"It sounds like they're not going to meet the regulatory standards in those states," Belzowski said.
Jack Nerad, editor of the online shopping guide Kelley Blue Book, said sales of the Grand Cherokee diesel will be limited because of the ban on sales in California and New York, which are major new car and truck markets.
The automaker could also face a roadblock with American consumers who still perceive diesel engines as smog-producing parts. Sooty, smelly and noisy are descriptions that come to mind for many U.S. consumers, Nerad said. "They think of the diesel that was out there in the early '80s," he said.
The Jeep Liberty diesel has exceeded its original sales target of 5,000 a year, with more than 11,000 units sold in 2005.
Allen Schaeffer, spokesman for Diesel Technology Forum, said increased diesel sales last year signal that consumers are interested in alternative fuels. In 2005, sales rose by 31 percent for diesel-powered cars and medium duty pickup trucks.
"In a six year period, sales have almost doubled," he said. "There's still a healthy market base out there of people interested in diesel and they're willing to pay premium for diesel vehicles."
In addition, Chrysler plans to sell more than 250,000 flex-fuel vehicles in 2007 and nearly 500,000 in 2008.
LaSorda is also expected to make a public request that Michigan push for more ethanol-85 fueling stations.
"That would go a long way toward making this fuel available for flex-fuel vehicles already on the road as well as those to come in the next few years," according to LaSorda's prepared remarks
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