‘We lose money’ on the sale of each GLK diesel, said one Mercedes-Benz company insider.
Payback.
No, I'm not talking about a Mel Gibson/Lee Marvin blood-spattered revenge epic (Marvin's version was titled Point Blank, actually). I am talking about what matters most to every buyer of a diesel or gasoline-electric hybrid: how long until the fuel savings pay back the price premium?
In the case of the just-on-sale 2013 Mercedes-Benz GLK250 4Matic BlueTec, no time at all. Zero. Not a second. This $43,500 compact SUV starts at a lower price – at a lower price! – than the gas-powered GLK350 4Matic ($44,900). How is that possible? I mean, cleaner diesel technology is expensive, adding perhaps $3,000-$5,000 to the cost of a vehicle.
"We lose money," one Mercedes insider told me at the preview of the revamped GLK. What? What kind of car company loses money on what will surely be one of its most in-demand models. Because let me say this right now, if you're in the market for a premium SUV of this size and with the GLK's capabilities, you simply must test drive the GLK diesel. I'm betting you'll like it.
You'll appreciate the torque, the twisting force that goes directly to the wheels in an instant. You'll applaud the revamped cabin, which looks delicious and expensive compared to the Filene's Basement-inspired interior of the 2012 GLK. Yes, the GLK here for 2013 still needs seats with more under-thigh support and wind noise on Highway 401 is noticeable off the wing mirrors and around the sunroof. But taken as a whole, the GLK is handsome and well finished.
Most of all, though, the segment's first four-cylinder diesel sips fuel. Pick a compact SUV, any compact SUV with all-wheel-drive at any price, and this diesel is the winner on combined fuel economy (7.2 litres/100 km). Better than the miniaturized Chevrolet Trax (7.7 combined) and Buick Encore (7.9). Better than the Mitsubishi RVR, the Nissan Juke, the Mazda CX-5, the Mini Countryman, the Ford Escape, the Honda CR-V – and on and on the list goes.
This is what diesel does for you – an instant fuel economy gain of 25 per cent or so. Sometimes more, never less. True, the 302-hp V-6 in the gas-powered GLK350 is quicker to 100 km/h (6.5 seconds). The diesel GLK hits 100 km/h in a factory-timed 8 seconds, but wallops the gas version on torque: 369 lb-ft versus 273. Here's the thing, though. Not only does the diesel have more muscle where it counts, the full flex comes at 1,600-1,800 rpm – versus 3,500-5,250 for the gas model.
Why on earth would anyone buy the gas model, then? Well, almost no one. Mercedes Canada would not be surprised to see 90 per cent of GLK buyers go for the diesel. So much for profitability. "We lose money," remember.
The simple truth is, Mercedes is pouncing on what is surely a temporary advantage. Until another auto maker arrives with a compact diesel SUV, Merc has the run of the marketplace. Eventually, Mazda is going to sell a diesel CX-5, but not this year; Mazda's new SkyActiv diesel will come first in the Mazda6 this fall.
Eventually, BMW will find a way to give Canadians a diesel X3 at a competitive price, but not for now. Eventually – and this one is coming soon – Audi will have a Q5 diesel. In fact, Audi Canada spokesman Cort Nielsen confirms that the Q5 will get a 3.0-litre TDI diesel this year, as will the A8, A6 and A7 sedans. The A8 is available this spring, with the remaining three going on sale in late summer or early fall.
Jeep will offer the 2014 Grand Cherokee with a Fiat-supplied EcoDiesel this year and that's interesting because Audi, Jeep and Mercedes look to be the only brands bold enough to do the obvious – put diesel power in an SUV where it belongs and does its best work.
We will be seeing more diesels in other vehicles, though. The Diesel Technology Forum, a lobby group in the United States, says 22 new "clean" diesel vehicles will be introduced in the United States this year. By 2017, the forum says more than 50 new diesels will reach the U.S. market by 2017. This forecast is based on market research from diesel technology supplier Bosch. If the diesel flood hits the United States, we'll get just as wet in Canada.
All these diesels will be what cheerleaders refer to as "clean" diesel engines. That is, they meet the same emissions regulations as gasoline-powered vehicles, though hybrids like the Lexus RX450h are even cleaner and by a wide margin.
Interestingly, the RX is about the same size as the GLK250, but lists at a much, much higher price – $56,750. If you want the cleanest SUV, get the Lexus. But fuel economy is a wash between the two and, thanks to expensive after-treatments and particulate filters, the Merc is clean enough by today's standard.
That matters because today and the next few years should be the heyday of diesel. Car companies looking for instant fuel economy gains to meet government-mandated, fleet-wide demands can get them with diesels. Over time, the only real future for diesels in passenger cars is as part of a diesel-electric hybrid. For the rest of this decade, however, diesels will have a big and growing presence.
Consumer want them and auto makers need them in their lineups. Indeed, Americans have gotten the fuel economy bug that infected Canadians decades ago. J.D. Power and Associates found in a recent study that fuel economy has become the No. 1 factor in vehicle choice for American; it's been a top-three worry for Canadians for years.
So this year, you're going to see a 2014 Chevrolet Cruze turbodiesel. We know about the coming Mazda, Audi and Jeep diesels, Volkswagen Canada offers a huge range of diesels already, and even BMW has said the United States will see a 2.0-litre four-cylinder diesel and 3.0-litre inline-six diesel engine in the near future. Cadillac might offer a diesel ATS; Mini would be smart to sell a diesel in, say, the Countryman; a VW Tiguan TDI diesel is on the way and there is talk of diesels for the Kia Optima and certain vehicles from Jaguar Land Rover.
That said, aside from General Motors and Mazda, car companies based in Detroit and Japan have shunned diesels, other than in pickup trucks. Ford says its EcoBoost direct-injection turbocharged system delivers fuel economy gains without the cost of cleaning up diesel emissions. Honda, at one point, thought about adding diesels to its lineup, but declined because of the cost of exhaust treatment systems such as BlueTec. Toyota and Ford have also put plenty of effort into hybrids. Hybrids present their own issues. Some have criticized them for not delivering the advertised fuel economy. Where does all this leave us?
"Acceptance of diesel has continued to improve," Mike Manley, chief executive of Chrysler's Jeep brand, told trade journal Automotive News. "To some extent it has been driven by some of the European manufacturers that continue to bring diesels to the U.S. and some of it is because the infrastructure for diesel continues to be developed."
If you test drive the GLK or any other new diesels, you'll like the experience. They're quiet and smooth, with none of the engine clatter and rattle that turned off buyers in the 1980s. Smoke? Nope. After treatments like BlueTec take care of it, and particulates, and acid-rain-inducing oxides of nitrogen, too.
Diesels may still only hold 3 per cent of the North American market today, but as Allen Schaeffer, the executive director of the Diesel Technology Forum, notes, "Some analysts predict diesel sales will reach 10 per cent of the U.S. market by 2020."
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