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MANCHESTER VILLAGE, Vt. — Although diesel fuel tops $5 a gallon in some areas, Mercedes-Benz USA is confident that its new clean Bluetec 50-state diesels will account for at least 15 percent of its SUV and cross-over sales.

Three new Bluetec vehicles go on sale in October with a new V-6 diesel: the 2009 320 ML crossover, GL SUV and R-class crossover.

The major reason for the diesels is fuel economy: A diesel is 20 to 33 percent better than a comparable gasoline model, say Mercedes-Benz executives. And the payback period is about two years faster than that of a hybrid SUV, they say.

Mercedes will charge a sticker premium of about $1,000 for its new diesels — comparable to what it charges on current diesel SUVs that can't be sold in eight states, Stephen Cannon, vice president of marketing for Mercedes-Benz USA, said at a press event here.

"If we threw on a giant premium, we would be hobbling ourselves before we even got out of the gate," Cannon said.

The premium for rival hybrids is upward of $3,000, he said. For example, the Lexus RX 400h all-wheel drive hybrid starts at $42,980, including shipping, while the RX 350 all-wheel drive starts at $39,865 — a difference of $3,115.

Luxury brands whose diesel models are coming in late 2008 and early 2009 aren't the only competition. Cannon said the Chevrolet Tahoe and Ford Escape hybrids also are rivals. Mercedes expects conquest sales from owners of full-sized SUVs "who can't just downsize into a compact car," said Cannon.

Shrinking price gap?

Mercedes also believes, citing studies, that in the next two years, the gap between premium and diesel fuel will shrink, said Cannon. According to the AAA fuel gauge report on Thursday, June 26, the average price for regular gasoline was $4.47 a gallon, compared with diesel at $4.77.

"We're already selling nearly 20 percent diesels some months of the models we now have, which can't be sold in big markets like California and New York," said Cannon. He added that 15 percent of the ML, GL and R-class vehicles sold through May — without incentives, lease subventions or advertising — have been diesels.

Today's Mercedes diesel light trucks can't be sold in eight states because they don't meet emissions standards first adopted by California, but the new Bluetecs can.

Thomas Ruhl, director for the R class, SUV hybrid and Bluetec, said Bluetec will "make diesel engines as clean as gasoline engines." With a highway consumption level of 24 mpg for the M- and R-class vehicles, "they offer 20 to 33 percent greater fuel efficiency than comparable gasoline engines."

Cannon said sales in California and New York are expected to be big. Both states have what he calls "extreme commuting" because of high real estate prices, "and that plays right into the strength of diesel.

"Hybrids perform less well in highway drives, and Bluetec beats them every time, so we have to educate them."

'Green is not going away'

Final prices won't be disclosed until shortly before launch. The ML price will rise more than the GL or R class because the 2009 model gets a mild midcycle freshening with new lights and rear taillights and an upgraded interior.

Mercedes will market the Bluetecs as "responsible luxury," starting in the fourth quarter with a print campaign, Cannon said.

"Green is not going away, and it is growing in the consciousness of our customers," said Cannon. "We would like to give that Bluetec logo as much cachet as the term hybrid has."

To promote Bluetec, Mercedes will participate in and sponsor green conferences throughout the United States. It also has a fleet of diesel SUVs that it will lend in key areas such as Aspen, Colo., and in Vermont. In Hollywood, 15 Bluetec vehicles will be lent to celebrities.