DETROIT -- Audi of America Inc. will launch diesel and hybrid versions of the Q7 SUV in 2008.
"We believe it is an important business opportunity we cannot afford to ignore," says Johan de Nysschen, executive vice president in charge of Audi.
Because of stricter U.S. emissions requirements, the diesel engine used in this market had to be re-engineered to meet requirements in all 50 states.
Audi of America had to pay the bill, de Nysschen says: "The issue is that a new engine had to be developed for the U.S."
Audi showed a concept diesel at the Detroit auto show last week, a 6.0-liter 12-cylinder with 500 hp for the Q7. But the U.S. market will get a 3.0-liter V-6 TDI powerplant for this market, says deNysschen. The same engine can be used in the A4 and A6 cars, as well as the new A5 coupe due later this year and smaller Q5 SUV for 2008.
Audi hasn't priced the Q7 diesel model, which is scheduled for the second half of 2008. Its executives estimate the diesel's premium is about $3,000 to $4,000 over a gasoline-powered car.
"We know the market will not bear that kind of price premium, but we have taken the decision to go ahead with the program anyway," de Nysschen says. "What I don't want to do is to wait before we have crossed all the T's and dotted all the I's before we start the development because then we will be watching on the sidelines as the business takes off."
Audi will charge "what the prevailing market" price is for diesels, de Nysschen says. But it may remove some content from the Q7 to help counter the cost of the diesel, deNysschen says.
He expects the diesel share in the United States to be about 15 to 20 percent seven years from now.
Audi expects only the Q7 in hybrid form. De Nysschen would not give an estimate on price: "It is no secret by now that we are not that ecstatic about hybrids, it is just one of those things we have to do."
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