DIESEL: Is the 4k worth it? It depends.....

[jimsaq]

Originally Posted by MrX

Agree. Here in America diesel will be a niche market. I am not sure why an Australian is trying to understand more about this market than us Americans.

I'm interested in how you took fraser's comment as 'trying to understand more about the US market'. He simply made a couple of factual comments about some characteristics of the two engines which have nothing to do with any market in particular.

[grover432]

Originally Posted by MrX

Just read an interesting article about the future of diesel cars in the US: " As a number of European vehicle manufacturers push ahead with plans to market more diesel cars in the US market, GM's global head of product development Bob Lutz told just-auto that there are significant problems for diesel that will hold back its market penetration there.
"Here's the problem for diesels and, as Europeans [automakers] are about to find out, Euro 5 is much more expensive than Euro 4 and Euro 6 is going to be more expensive still," Lutz said.
Lutz maintains that federal emissions regulations in the US will be expensive for diesel engines to meet.
"In the US we have Bin 5 Tier 2 and that is more severe than Euro 5 and is about the same as Euro 6. So, the emissions hardware required in the US for diesels starting in 2010 is extremely expensive. You will be paying a very substantial price premium even over today's diesels," he said.
"You will have the privilege of paying another $3,000 to get a 20% fuel saving to buy a fuel that is 20% more expensive per gallon than normal pump petrol. You have to start asking yourself, where's the benefit?"
Lutz also pointed out that differential taxation rates helped diesel to take-off in Europe, something that isn't present in the US."

Isn't Mr. Lutz talking about the difficulties his company will face bringing diesel vehicles to the North American market? BMW and Mercedes already have Bluetec engines that meet Bin 5 Tier 2 which is required for emission regulations in 2010. So the cost of diesel emission equipment for these two companies will not go up.

The change to Bluetec by Mercedes (2008 to 2009) resulted in a 1L/100km fuel consumption increase and the 35d has already been rated, so there should be no additional costs related to fuel economy, moving forward.

As for diesel fuel costs, this is of course the wild card. At this point, the drivability of the diesel puts it close in performance to the 4.8, with lower monthly fueling costs (considering better mileage but higher diesel cost).

If BMW introduces the gas TT in the X5, it would have similar performance to the 4.8 with slightly better fuel economy. The X6 35i uses 15.7 L/100 cit and 11.8 L/100 hwy. I would expect the X5 to be similar. This compares to the 4.8 at 16.8 City/12.4 hwy. Not a huge diference, but the option cost should be no more than the diesel, which, in Cnada would mean a savings of $7,000 on the purchase price of a 35i X5.

Of course the 35d would be the vehicle of choice ofr me. In my area, if I hunt around, I can buy diesel for about the same as premium fuel (that's today, who knows about tomorrow). Given the uncertainty, I'd be inclined to lease an X535d rather than purchase.

I guess there is no free lunch when it comes to fuel economy. the same thing is happening to people who buy hybrids. You save at the pump, but you have to pay thousands more for the technology. After8 years you need to buy a new battery for $7,000. If you trade before then, you have to deduct this cost from value. In addition, ou face the uncertainty of future value of your hybrid car/suv as emerging technologies are likely to obsolete your hybrid (in terms of technology) with better, cheaper and more efficient hybrids. It's the early adopter cost we are paying with those vehicles right now.

I'm starting to think Honda Civic .....

[Fraser]

Originally Posted by jimsaq

I'm interested in how you took fraser's comment as 'trying to understand more about the US market'. He simply made a couple of factual comments about some characteristics of the two engines which have nothing to do with any market in particular.

Thanks for the support. I'm not "trying to understand the US market" nor am I trying to predict whether the X5 diesel will be a success in the US. All that will play out in due course.

When diesel power first arrived in the X5 in Australia (in early 2003 in the E53) many people were sceptical that buyers would accept diesel in a luxury vehicle. But the diesel engine, and the subsequent diesels in both the E53 and the E70 (we have now had four generations of diesel engines in the X5 in Australia) have proved a run-away success despite the fact that we pay anywhere between 10% and 25% more for diesel than petrol (it varies all the time). And, like the US, not all fuel stations (especially in the cities) sell diesel. For most diesel buyers it's not simply a matter of relative fuel costs and economy, it comes down to the diesel's superior real-world drivability.

[MrX]

Originally Posted by grover432

Isn't Mr. Lutz talking about the difficulties his company will face bringing diesel vehicles to the North American market? BMW and Mercedes already have Bluetec engines that meet Bin 5 Tier 2 which is required for emission regulations in 2010. So the cost of diesel emission equipment for these two companies will not go up.

The change to Bluetec by Mercedes (2008 to 2009) resulted in a 1L/100km fuel consumption increase and the 35d has already been rated, so there should be no additional costs related to fuel economy, moving forward.

As for diesel fuel costs, this is of course the wild card. At this point, the drivability of the diesel puts it close in performance to the 4.8, with lower monthly fueling costs (considering better mileage but higher diesel cost).

If BMW introduces the gas TT in the X5, it would have similar performance to the 4.8 with slightly better fuel economy. The X6 35i uses 15.7 L/100 cit and 11.8 L/100 hwy. I would expect the X5 to be similar. This compares to the 4.8 at 16.8 City/12.4 hwy. Not a huge diference, but the option cost should be no more than the diesel, which, in Cnada would mean a savings of $7,000 on the purchase price of a 35i X5.

Of course the 35d would be the vehicle of choice ofr me. In my area, if I hunt around, I can buy diesel for about the same as premium fuel (that's today, who knows about tomorrow). Given the uncertainty, I'd be inclined to lease an X535d rather than purchase.

I guess there is no free lunch when it comes to fuel economy. the same thing is happening to people who buy hybrids. You save at the pump, but you have to pay thousands more for the technology. After8 years you need to buy a new battery for $7,000. If you trade before then, you have to deduct this cost from value. In addition, ou face the uncertainty of future value of your hybrid car/suv as emerging technologies are likely to obsolete your hybrid (in terms of technology) with better, cheaper and more efficient hybrids. It's the early adopter cost we are paying with those vehicles right now.

I'm starting to think Honda Civic .....

Good analysis Grover432. He was indeed saying about GM, but my point is the future price gap between diesel and gasoline. Like you said, there is no free lunch. I am more inclined to get a V8 this year because I think it still drives better than the diesel and I could get a nice discount off MSRP when compared to the diesel since the diesel has just been announced. I will wait to drive the diesel to make my final decision.

[MrX]

Originally Posted by Fraser

Thanks for the support. I'm not "trying to understand the US market" nor am I trying to predict whether the X5 diesel will be a success in the US. All that will play out in due course.

When diesel power first arrived in the X5 in Australia (in early 2003 in the E53) many people were sceptical that buyers would accept diesel in a luxury vehicle. But the diesel engine, and the subsequent diesels in both the E53 and the E70 (we have now had four generations of diesel engines in the X5 in Australia) have proved a run-away success despite the fact that we pay anywhere between 10% and 25% more for diesel than petrol (it varies all the time). And, like the US, not all fuel stations (especially in the cities) sell diesel. For most diesel buyers it's not simply a matter of relative fuel costs and economy, it comes down to the diesel's superior real-world drivability.

Fraser, I do get your point, but each market is different. I do not know much about the market where you are, but I understand the V8 and the diesel versions of the X5 are much more expensive in Australia compared to the US. Therefore the price of admission is very different. For us on this side of the pond, it is probably a harder choice to make. With regards to the diesel performance versus gas, I am still skeptical about it. It is difficult to imagine that a V8 gasoline will not crush the diesel in real-world drivability. Reading what Barcius posted, he test drove both US spec cars in the factory here in the US and most of the drivers voted for the V8 as the better/superior car in most aspects. I believe BMW took the results and priced the diesel accordingly. I can give you my impression once I drive the diesel. I've been racing for years here is the US so I can give a honest and professional feedback once I drive it.

[tim-atl]

Originally Posted by MrX

Good analysis Grover432. He was indeed saying about GM, but my point is the future price gap between diesel and gasoline. Like you said, there is no free lunch. I am more inclined to get a V8 this year because I think it still drives better than the diesel and I could get a nice discount off MSRP when compared to the diesel since the diesel has just been announced. I will wait to drive the diesel to make my final decision.

Why do you think the price gap between diesel and gas would widen?

Tim

[tim-atl]

Originally Posted by MrX

Just read an interesting article about the future of diesel cars in the US: " As a number of European vehicle manufacturers push ahead with plans to market more diesel cars in the US market, GM's global head of product development Bob Lutz told just-auto that there are significant problems for diesel that will hold back its market penetration there.
"Here's the problem for diesels and, as Europeans [automakers] are about to find out, Euro 5 is much more expensive than Euro 4 and Euro 6 is going to be more expensive still," Lutz said.
Lutz maintains that federal emissions regulations in the US will be expensive for diesel engines to meet.
"In the US we have Bin 5 Tier 2 and that is more severe than Euro 5 and is about the same as Euro 6. So, the emissions hardware required in the US for diesels starting in 2010 is extremely expensive. You will be paying a very substantial price premium even over today's diesels," he said.
"You will have the privilege of paying another $3,000 to get a 20% fuel saving to buy a fuel that is 20% more expensive per gallon than normal pump petrol. You have to start asking yourself, where's the benefit?"
Lutz also pointed out that differential taxation rates helped diesel to take-off in Europe, something that isn't present in the US."

There are a couple amazing assumptions here (belonging to Lutz, not MrX) -

The only reason anyone would buy a diesel is for for fuel savings and that savings must result in a lower TCO for said auto or there's no reason for a consumer to buy a diesel. Personally, I tow a boat and I want an engine that will last hundreds of thousands of miles.

Assumption #2 - Execs at GM are still credible (ya, cheap shot - I know).


Tim

[MrX]

Originally Posted by tim-atl

Why do you think the price gap between diesel and gas would widen?

Tim

I work for a company with a fleet of thousands of sales vehicles. We recently bought 10 Jetta diesel to test their durability and performance over the next 4 years. I have been reading a lot of opinions about why the price gap of diesel versus gasoline has widen over the last couple of years. The consensus is that it will continue for several reasons:
1. Demand for gas in the US has decreased, but diesel demand remains strong
2. Demand for diesel in Europe continues to grow fueled by government incentives on diesel cars
3. As refineries cut gas production to meet demand it negatively impacts diesel production too
4. Oil industry is postponing investment in diesel refining capacity despite record profits.

Make sense?

[Fraser]

Originally Posted by MrX

Fraser, I do get your point, but each market is different. I do not know much about the market where you are, but I understand the V8 and the diesel versions of the X5 are much more expensive in Australia compared to the US. Therefore the price of admission is very different. For us on this side of the pond, it is probably a harder choice to make. With regards to the diesel performance versus gas, I am still skeptical about it. It is difficult to imagine that a V8 gasoline will not crush the diesel in real-world drivability. Reading what Barcius posted, he test drove both US spec cars in the factory here in the US and most of the drivers voted for the V8 as the better/superior car in most aspects. I believe BMW took the results and priced the diesel accordingly. I can give you my impression once I drive the diesel. I've been racing for years here is the US so I can give a honest and professional feedback once I drive it.

I think that everything in Australia is more expensive than the US! Current X5 Aussie pricing is:

3-litre six-cylinder petrol: $86,635
3-litre six-cylinder single-turbo diesel: $88,541
3-litre six-cylinder twin-turbo diesel: $105,490
4.8-litre V8 petrol: $121,908

Aussie dollar is currently worth 65 cents US. Six months ago it was close to parity (97 cents).

As for relative performance between the 4.8 and the twin-turbo diesel, in Aussie spec the 4.8 is 0.7 second faster to 100 kilometres per hour (6.5s v 7.2s) and 0.7 second faster over the standing-start kilometre (26.6s v 27.3s). For your reference, 1 kilometre = 0.62 mile.

However, these figures don't tell the whole story. I've driven both the 4.8 and the 35d back to back over an extended period (not just at a customer clinic) and the V8 simply can't match the diesel's huge bottom-end and mid-range power and needs all the revs that it can muster to see off the diesel. By 1200rpm the diesel is already making more torque than the 4.8 ever produces, and the diesel's peak torque is some 20% better than the 4.8 and is produced from 2000rpm whereas the 4.8's peak torque doesn't come on stream until 3400rpm. As a racer, I'm sure that you will appreciate that performance is not just about peak power, but power spread and power delivery. I can't really comment on Barcius' comments because all my experience has been with the Australian models and your models (both petrol and diesel) may be significantly different.

[tim-atl]

Originally Posted by MrX

I work for a company with a fleet of thousands of sales vehicles. We recently bought 10 Jetta diesel to test their durability and performance over the next 4 years. I have been reading a lot of opinions about why the price gap of diesel versus gasoline has widen over the last couple of years. The consensus is that it will continue for several reasons:
1. Demand for gas in the US has decreased, but diesel demand remains strong
2. Demand for diesel in Europe continues to grow fueled by government incentives on diesel cars
3. As refineries cut gas production to meet demand it negatively impacts diesel production too
4. Oil industry is postponing investment in diesel refining capacity despite record profits.

Make sense?

I don't know enough about the fuel industry to disagree but it did make me think of something. I had always assumed the price disparity was due to taxes since diesel used to be considerably cheaper. Now I'm wondering if it's more because it's ULSD. Which leads to the follow up question - do European gov'ts subsidize diesel or are they possibly burning the old non ULSD that requires less refining (making the price cheaper than gas)?

Tim