BMW won't push diesels in U.S.

FRANKFURT -- BMW will not join forces with German carmakers Mercedes-Benz, Volkswagen and Audi to market clean diesels in the United States under the Bluetec name.

While Volkswagen and Mercedes already sell diesels in the U.S. market, BMW has no plans to do so any time soon and declines to use the Bluetec name, currently being used to help sell Mercedes-Benz E320s that run on ultra low sulphur diesel in the U.S.

The world's biggest premium carmaker, a fierce rival of DaimlerChrysler's luxury Mercedes brand, first wants to develop a urea-based technology to reduce nitrogen oxides before considering a sustained entry into the U.S. diesel market.

"We are in the process of thinking of a name that is different from Bluetec," a spokesman for BMW said on Wednesday.

Helped by diesel fuel subsidies, diesels make up around half of the western European car market but traditionally they have been a tough sell for passenger cars in the U.S.

Widespread perceptions of diesels as dirty and loud, regulatory hurdles and diesels' extra expense -- they cost around $2,000 more than petrol engines -- have limited their appeal in the past.

But last month's advent of diesel fuel in the U.S. with a low sulphur content of just 15 parts per million has opened a window for carmakers to highlight diesel's far better fuel economy and robust towing power. Diesels typically get around 30 percent better mileage than petrol engines.

Volkswagen, Audi and Mercedes consequently want to push diesels under the Bluetec name as an alternative technology to counter the success of Toyota's hybrids.

"Three brands have more power," a Volkswagen spokesman said on Wednesday, adding Mercedes' sister brand Chrysler also would join the alliance at a later date.

A formal announcement was due on Nov. 28 ahead of the Los Angeles car show.

Developed by Mercedes-Benz and diesel injection system specialist Bosch, Bluetec with AdBlue lets cars meet the stringent U.S. emissions norm, Bin 5, which goes into effect in 2009.

Due in 2008, the AdBlue system uses urea-based additives to cut nitrogen oxide emissions and thus meet clean air rules in all 50 U.S. states.

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