Check out this piece from the Globe and Mail.
Engines to be offered in Canada in 2008

GREG KEENAN
AUTO INDUSTRY REPORTER
December 1, 2006

BMW Canada Inc. will begin offering diesel engines on its vehicles here in 2008 as technology overcomes the environmental issues and regulations that have kept diesels from becoming as popular in North America as they are in Europe.

"An enhanced concept for minimum exhaust gas emissions has been developed for this engine to meet the strict emission standards in effect in California as well as the rest of the U.S. and Canada," BMW said in a statement yesterday.

There is a market for diesels, said BMW Canada marketing director Joe Lawrence, who noted that BMW buyers ask about diesels and are aware of the auto maker's offerings in Europe, where more than two-thirds of the vehicles it sells are equipped with diesels.

"They'd better order a lot of them," added industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. "Canada's ripe for a diesel."

If diesels were offered across the entire range of vehicles available in Canada, they could claim as much as 10 per cent to 12 per cent of the market, he said.

Mr. Lawrence said BMW is still assessing which vehicles will be offered with a diesel option.

In terms of demand, Canada probably falls about halfway between Europe, where more than two-thirds of the vehicles BMW sells are bought with diesel engines, and the United States, where diesel sales by all auto makers are a tiny slice of the market, he said.

Virtually all auto makers selling vehicles in North America are working on reducing the emissions from diesel engines to meet stricter regulations. At the moment, those regulations are most strict in states such as California, New York and Massachusetts. Other U.S. states and Canada hew to less-stringent regulations.

"We believe that we will be in the market with a total North American solution as quickly as anybody else," Mr. Lawrence said.
Other auto makers are jumping into the diesel fray as well, with BMW's key rival in the luxury market, Mercedes-Benz, offering its Bluetec technology, which reduces the emissions from a diesel engine.

In some segments of the market, clean diesels could capture as much as 30 per cent of sales, said JoAnne Caza, a spokeswoman for Mercedes-Benz Canada Inc. All of that auto maker's "smart" subcompacts are equipped with diesel engines as are a version of the E320 sedan and two sport utility vehicles. Another SUV will be offered early next year.
The Chrysler division of DaimlerChrysler AG will borrow a Mercedes 3-litre diesel engine and throw it into the Jeep Grand Cherokee sport utility vehicle for sale beginning in the first quarter of 2007. That will add to its Dodge Ram pickups and Dodge Sprinter full-sized vans, which now offer a diesel option.

General Motors of Canada Ltd. offers diesels in some of its heavy-duty pickup trucks and SUVs and will offer a light-duty diesel on its pickup trucks in 2009.

"North America still has this stigma about what a light-duty diesel really is," said GM Canada spokesman Stew Low, adding that the view of a noisy, 18-wheeler occasionally belching black smoke doesn't apply to diesels used on light vehicles.

Volkswagen AG sells Golf, Beetle and Jetta models with a diesel engine and is also developing new, more environmentally friendly technology that will be available in 2008.

Mr. DesRosiers said his surveys of Canadian drivers indicate that they don't share the view of Americans that diesels are noisy, smoky and hard to start in cold weather.

"The Americans have had some bad experiences with diesel and it tainted the marketplace," Mr. DesRosiers said.