The continued head in the sand denial or blissful ignorance of some automotive marketing executives regarding diesel powered vehicles for the United States is confounding. The same old refrains come from their mouths, “It costs too much. Americans wont buy them. There has to be a business case”.
Chrysler is the latest company to ignorantly close the door on a diesel engine option for American buyers on one of their most important new models. The all new 2011 Jeep Grand Cherokee will be built with a high tech fuel sipping 3.0 liter turbo-diesel for export markets only.
Recently Phil Jansen, the Grand Cherokee’s chief engineer stated that a diesel for the American market is, “An open question because the business case has to make sense. It’s expensive.” An article recently stated that one of their main issues for not offering the diesel to the U.S. is because, “Americans may not accept the extra price premium for the diesel engine”.
Of course the overwhelming evidence out there in the marketplace knocks that argument down cold. We just reported earlier this week that 31% of all Touareg SUV’s that Volkswagen sells in the US are TDI equipped. Volkswagen dealers cannot keep them in stock and do not have to discount them to move them.
Perhaps Chrysler should look at their own past experience with the CDI equipped Jeep Grand Cherokees in the US. When the company hit the skids in 2007 and 2008 they were fire-selling Grand Cherokees with $6000-8000 dealer incentives, that is except for CDI models to which were easily sold a full price. And if you ever tried to find a selection of them, you could not. Dealer’s rarely had one just sitting around.
And if anyone still believes that American’s won’t pay for the costly diesel option, one need only look at the sales of light duty trucks. Ford, GM and yes Chrysler sell hundreds of thousands of trucks with a $5000-$7000 diesel engine option.
The point? These marketers and engineers at American automakers who still live in the fantasy that “Americans wont buy diesels” are wrong. Dead wrong. One only need look at Volkswagen, Audi, and Mercedes Benz who can’t build enough of them. And they need only look past their ignorance to their own truck lots and ask what the take rate is for their own diesel engines.
Meanwhile, when the new 2011 Jeep Grand Cherokee with its 3.6 liter and 5.7 liter gas engines chokes on the sales lots next time gas prices skyrocket, instead of making an extra $3000 on a diesel option, they can give that much away and then some in incentives to move the same old stuff.
