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March 2, 2009, 2:59 pm

Diesel Debut: 2009 BMW 335d Sedan

2009_bmw_335dIn response to heightened awareness about fuel economy, BMW is bringing diesel engines to the U.S. for the first time in several decades. The engines are available in two models, including the 335d sedan in the heart of BMW’s lineup.

Naturally, BMW executives are anxious to discover how Americans will view these diesels, which Europeans have so ardently embraced. The results are just beginning to trickle in but here’s a prediction: They will love the performance but be perplexed by the economics.

If you have been following the advances of diesel-powered vehicles made by Mercedes-Benz and Volkswagen, you know that modern diesels aren’t any noisier, smellier or slower than gasoline engines.

My 335d test car, painted in a boy-racer Montego Blue Metallic, proved the point. It was quiet, smooth, peppy and easy to start in cold weather. Zero to 60 miles per hour arrives in 5.7 seconds, according to Car & Driver, and its time for the quarter mile was measured at 14.2 seconds, vs. 13.5 seconds for the gasoline-powered 335i. Diesel engines arer renowned for their low-end torque, and this one is no exception.

No complaints about performance then. But the tab for my oil burner started at $44,725 (including delivery charge), nearly $4,000 more than the conventional 335i. With the usual bells and whistles (including $550 for the paint job), the total came to $51,445. Appreciation of modern diesel technology does not come cheaply.

And sad to say, you are not going to make up for the higher starting price with savings on fuel. The combined fuel economy of the diesel is 27 miles per gallon vs. 20 mpg for the 335i. I even managed to average a robust 35 mpg during several hundred miles of mostly highway driving.

But the diesel fuel premium where I hang out in northwestern Connecticut is 50 cents to 60 cents a gallon. You can blame some of that on a shortage of refinery capacity and some on federal tax policy, but it is a big economic hurdle to overcome. Add to that the inconvenience of not having diesel fuel available at every stop, and its demerits add up.

You may find other reasons to love a diesel: the sense of owning something different, an appreciation for advanced technology, or just a desire to drive further between fuel stops. As environmental concerns grow and mass-market manufacturers like Honda come forward with their own diesel engines, you may see the popularity of diesels turn up.

Until then, they are likely to remain exotic but minor players as the auto industry struggles to find a durable solution to the issues of climate change and dwindling oil reserves. But give BMW credit – again – for trying something new.

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Alex TaylorAlex Taylor III has received numerous honors for his coverage of the automobile industry, including 100 Notable Business Journalists of the 20th Century, three International Wheel Awards from the Detroit Press Club Foundation, and Journalist of the Year by the Washington Automotive Press Association. He worked at the Detroit Free Press before joining TIME magazine, where he wrote cover stories about Lee Iacocca and what was then known as the Big Three. At FORTUNE, he has expanded his coverage to the global industry, writing about such companies as Mercedes-Benz, BMW, Toyota, Honda, Nissan and China's SAIC. Taylor lives in Manhattan and walks to work.
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