Why automakers are investing in diesel engines in the U.S.

UPDATED: 8/5/13 11:32 am ET

TRAVERSE CITY, Mich. -- On the surface, the Volkswagen brand's total July sales of 35,779 units looks like chump change compared with The Big Boys.

The top-selling vehicle in the country, the Ford F-150, accounted for 60,449 sales in July, while one Honda model, the Civic, nearly single-handedly outsold all of Volkswagen's models combined.

But drill deeper into VW's July sales and you'll see one of the reasons why domestic automakers are starting to invest serious cash in diesel engines for North American vehicles other than heavy-duty pickups.

In July, one out of every three customers who bought a VW spent an extra $2,000 or so for a diesel engine. Diesels accounted for 30 percent of all of the VW brand's July U.S., a record. The German automaker is on track to reach its goal of selling 100,000 diesels in the North America in 2013.

VW's diesel success has been building for a long time.

For decades, VW has steadfastly stood by the diesel and invested in improving its performance, reliability and drivability. The diesel is no longer the smoky, stinky engine it once was. Along the way, VW has built a legion of loyal diesel drivers who display a cult-like devotion to their cars, bragging about the fuel economy and longevity of the engine, and, more importantly, buying one VW diesel after another.

Now, because of VW's growing sales, the high price of gasoline and the looming 54.5 mpg government mandated fuel economy standard, some automakers have decided they can no longer afford to ignore the diesel engine.

This summer, diesel versions of the Chevrolet Cruze and Jeep Grand Cherokee arrive at dealers. Later this year, the Ram 1500 light duty truck will be available with a V6 turbo diesel engine. And more diesels are on the way from Mazda, Cadillac and several other automakers.

On Tuesday at the Advanced Powertrain Forum at the 2013 CAR Management Briefing Seminars here, speakers from Ford, Volkswagen, Toyota and Chrysler and the EPA will discuss nearly all aspects of automotive powertrain technology -- including the diesel engine.

Ford and Toyota, have placed their fuel economy bets on hybrids and have not announced plans for diesel engines in their cars and light duty trucks. Both automakers have an array of top quality diesel engines overseas that could be adapted for use in North America.

But high-mileage hybrids may not be enough to get Ford and Toyota over the fuel economy goal line, as both automakers rely heavily on profitable sales of fuel-thirsty trucks and SUVs.

The diesel question will come up at Tuesday's forum. It will be interesting to hear if Ford and Toyota have re-evaluated their stance on diesels. You can bet the product development folks at both companies will be closely watching the sales numbers for Cruze diesel, the Grand Cherokee diesel and the Ram 1500 with its EcoDiesel engine.

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