Mercedes-Benz CEO Dieter Zetsche told Motor Trend this week that increased cost was not going to be an issue for his company to meet new fuel economy standards. Obviously getting improved efficiency out of powertrains would make them more expensive as they have to meet U.S. CAFE and European CO2 emissions limits. However, while U.S. executives like Bob Lutz are talking about adding $5,000 or more to the price to meet 35mpg standards, Zetsche looks at it differently. The use of clean diesels, HCCI DiesOtto engines, hybrids and fuel cells will raise prices. The higher initial purchase price will be offset for customers through reduced operating costs. According to Zetsche, if the cost premium can be recovered through fuel savings in the first 3-4 years of driving than customers will be satisfied. Mercedes also intends to protect their ten percent profit margins through increased efficiencies in other areas of the vehicle. That probably means that Mercedes owners will give up some features for improved efficiency. Of course for a premium brand like Mercedes, it's a lot easier to talk about protecting margins than it is for mainstream brands like GM and Ford. Being largely rid of the burden of Chrysler probably doesn't hurt either. Finally Zetsche says an S-Class diesel hybrid will debut in two years with DiesOtto engines about 3-5 years out.

[Source: Motor Trend]