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Mercedes-Benz is building mostly diesels for US highways in '82

The diesel engine is making a clean sweep at Mercedes-Benz of North America -- almost. Indeed, only one in every five Mercedes-Benz cars sold in the United States in 1982 will have a gasoline engine under the hood while six will have diesels -- four of them turbocharged.

At the same time, the West German luxury-car, truck, and industrial-vehicle builder will:

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* Extend the total-vehicle warrantly, except tires, on all its 1982-model cars by 50 percent -- from 24 months/24,000 miles in 1981 to 36 months/36,000, whichever comes first. The antitrust warrantly runs for six years, the same as in Canada.

* Hold the price on its cars because of the strength of the US dollar.

"We are not increasing prices over 1981 except that we are charging for optional equipment which is made standard," says Walter Bodack, new president of Mercedes-Benz of North America Inc., who took over the job July 1.

"The biggest example of this is the installation of turbochargers on the 300D and 300CD."

All imported-car companies have been making windfall profits because of the higher strength of the US dollar vis-a-vis other currencies over the last few months. The US distributors buy the cars from the parent companies in lower-valued local currencies and then sell them for US dollars.

Defending the company's position, Mr. Bodack says that Mercedes-Benz has had to absorb rising costs in the past because of competitive conditions at the time.

Then he asserts: "We hope to be able to maintain our prices throughout the model year."

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Overall, there are no big vehicle changes in Mercedes-Benz cars for 1982 except for the limited-production 380SEC 4-passenger coupe with a 155-hp, fuel-injected V-8, due later in the fall, and the added thrust of the diesel.

Mainly, what Daimler-Benz, the manufacturer, has done over the years is civilize the diesel. Long used as an economical power plant for commercial vehicles -- noisy, smelly, poky, expensive -- the Stuttgart-based vehiclemaker had made the diesel acceptable in other, more genteel, high-priced company.

A diesel-engine car no longer raises eyebrows on the highway or at the country club.

The switch to diesel power was a conscious decision made by Daimler-Benz a half dozen years ago when the Arab oil embargo dried up the gas pumps. Daimler-Benz had to do some quick footwork.

"We found ourselves short on what we could sell and long on what we could not sell," explains Hans Jordan, vice-president of marketing for Mercedes-Benz of North America. The company was oriented to the 8-cylinder gasoline engine which was not noted for high mileage on the road.

Diesel engines were noisy, smelly, and short on power, but they gave far higher mileage to the motorist -- about 30 percent better fuel economy than a gasoline engine.

"We decided that the turbo-diesel engine was the answer, at least at this stage of the game," he adds. Thus, "we decided to take out the disadvantages of the diesel and keep the advantages."

By switching an increasing part of its car output to diesel -- half of all Daimler-Benz output but 80 percent of all US sales for 1982 -- the company has been able to meet the rising fuel-economy standards in the US and avoid being pushed into the position of having to pay a gas-guzzler tax on its cars.

As a result of the diesel, M-B is keeping a few jumps ahead of the mpg standards and increasing its sales at the same time. The company has 10 percent of the market share for cars that sell for $14,000 and up. The lowest-priced Mercedes is the 240D at $21,000.

M-B cars are averaging 25.1 miles per gallon in 1981 while the law calls for 22. In 1982 the law requires 24 but M-B jumps to 21.1, a one-mile gain over calendar year 1981. The company also can meet the 1983 standard of 26 with its current model range.

By 1984, however, Mercedes-Benz will introduce a new smaller-size car, code-named the W-201, which is expected to help the company over the mpg hump. The standard rises to 27 mpg in 1984 and 27 1/2 in 1985.

Looking ahead, the West German company expects to reach 60,000 cars sales a year in the US in 1982, compared to 25 years ago when it sold 3,100 and a Mercedes sports car could be bought for $4,000.

Who buys a Mercedes? The median age is 54, but dropping, and the median income $62,000.

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