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Benz ponders its post-LCT diesel future

Diesel drought: Mercedes-Benz will have to wait until next-generation versions of its large models arrive before it can take advantage of the LCT's new under-7.0L/100km and under-$75,000 exemption clause.

Mercedes-Benz unable to capitalise on LCT exemption, but still plans more diesels

16 Oct 2008

MERCEDES-BENZ Australia is moving to take advantage of the so-called “seven-litre amendment” of the luxury car tax, but potential new low-consumption diesel-powered models are still at least a year away.

And the only current Benz model that falls under the government’s LCT-exempt clause (price between $57,180 and $75,000 and returning better than 7.0L/100km fuel consumption) is the 2.1-litre diesel-engined C220 CDI medium sedan.

Early next week, the company will announce a $1004 price cut for the C220 CDI from $61,530 (including the increased 33 per cent LCT) to $60,526 as a result of removing the luxury tax.

However, while BMW has been able to slash $5345 from the price of its large 520d sedan, Mercedes does not currently offer a small-capacity diesel in its equivalent E-class range and will not be able to offer one until the new-generation model comes here late next year.

Mercedes-Benz Australia communications manager David McCarthy said that the company will introduce at least two new turbo-diesel engine variants when the new E-class arrives at the end of 2009, as well as a new-generation V6 to replace the existing 3.0-litre V6-engined E280 CDI.

The new models to be introduced next year will include a potentially tax-beating E220 CDI model fitted with the 2.1-litre unit already seen in the C220, which produces 125kW of power and 400Nm of torque, while a new 2.5-litre version will appear as the E250 CDI.

4 center imageLeft: Mercedes-Benz C250 CDI engine.

Further down the track, an even more advanced 2.5-litre unit will debut, developing a remarkable 150kW and 500Nm – not far short of the current 3.0-litre V6-powered C320 CDI’s 165kW and 510Nm.

This new engine, which was previewed at the recent Paris motor show, returns just 5.2L/100km when fitted to a C-class.

But Mr McCarthy said it was too late to do anything with the current model because production for Australia finishes next month, “so the opportunity to put, say, an E220 diesel E-class into the mix is not going to happen”.

“The seven-litre amendment has captured the public’s interest for a whole range of reasons and we are reviewing, on the basis of that, the engines we have,” said Mr McCarthy.

“We’re going to try as hard as we can to get as many engines that fit into the next generation E-class. We are looking at all our options.

“Our latest-generation diesel – 2.2 litres, 150kW, 500Nm – that would be fantastic in an E-class.”

Regardless of the LCT exemption, Mercedes-Benz is continuing to expand its diesel line-up – evidenced by the recent introduction of 1.8-litre CDI variants of both the A-class and B-class – and expects that the eventual introduction of a mass-market diesel Commodore or Falcon will raise awareness and stimulate interest.

Last year, 22.3 per cent of new Mercedes-Benz cars sold were diesel-powered compared with only 1.3 per cent in 1998.

“Diesel is increasing in popularity – it’s off a low base, but it’s now got some momentum – and I think that getting a local serious volume car out on the mass market that’s diesel will drive some improvement,” said Mr McCarthy.

“One of the things that keeps coming up from customers, particularly women, is that they don’t like the diesel fuel retail delivery experience – they don’t like the grubby pumps, they don’t like the fact that some of them are around the back, they don’t like the price – so I think you need some volume vehicle there to drive some improvement.”

Mr McCarthy said there was a great opportunity for one of the oil companies to “grasp the situation and provide a better retail experience for diesel”.

Mercedes will almost certainly introduce the new four-cylinder 2.5-litre CDI into the M-class SUV range and is also looking at options for the S-class, but Mr McCarthy said that these would still be some years away.

“It’s not on the horizon for us immediately – I’d say you’d be looking at a couple of years – but I think that 2.5 would have great application in M-class,” he told us.

“A car the size of an S-class, you need 400Nm to meet the customer performance expectation and you can get that. There isn’t a plan at this point to put that (engine) in an S-class in the near future that I’m aware of, but (thinking about it) has got to be happening.

“Over time, engines are definitely going to get smaller.”

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