As the pressure to reduce fuel consumption and carbon dioxide emissions continues unabated, it’s not just gasoline engines that are getting the right-sizing treatment. The diesel engine is set to shrink as well, at least at BMW and Mercedes-Benz. Both manufacturers currently offer diesel V-8s of 4.4L and 4.0L sizes respectively in their top models. However, both companies are likely to start replacing their current diesel model range with newer, smaller displacement alternatives with new boosting technology that will improve the power while reducing fuel consumption. That means following the path BMW has been traveling recently with sequential twin turbocharger systems such as the one on the 123d. These setups use a pair of different sized turbos that help to enhance torque at both low and high revs. This will allow the V-8 to be replaced by inline and V-6 cylinder engines while current six cylinder applications will go to fours. All of these will also likely be combined with mild hybrid systems for even more improvement. Besides the improved efficiency of the smaller engines, weight will also be reduced, further enhancing fuel economy. So far, the one exception to this trend is Audi which just announced production of the Q7 V-12 TDI with its new 6.0L V-12 diesel. That however will be a very low volume application and more mainstream units will probably go the downsizing route.

Mercedes-Benz maker Daimler has revealed it is relying on demand from China, India and Russia to offset North America’s ailing car and truck market this year.

The luxury car maker said the North American market for cars and light trucks is likely to continue to suffer from the impact of falling house prices in the wake of the sub-prime crisis.

	Daimler is relying on China, India and Russia to drive sales

The group also expects the market in western Europe to remain flat, with sales of 14.8m units.

The news came as the group beat analysts expectations, reporting profits of 1.7bn euros (£1.3bn) for the fourth quarter.

Driven to despair, and to a loss, by its merger with Chrysler, Daimler finally offloaded the US car maker to private equity firm Cerberus Capital for £3.74bn last May, after a decade of miserable results.

Cost-cutting initiatives over the period included 9,700 job losses at Mercedes-Benz.

Still together this time last year, the merged group reported a loss of 12m euros. Minus Chrysler, which is best-known for the Jeep, Daimler beat analysts’ profits expectations of 1.31bn euros for the quarter.

The group’s shares rose almost 4pc to 55.85 euros in response today - their highest level in nearly a month. Daimler’s shares have tumbled 18pc this year, reducing its market cap to 55.1bn euros, amid growing concerns for the auto industry.

In a statement today, Daimler said: “Global growth in 2008 is once again expected to be primarily driven by the high growth rates of the major emerging markets, especially China, India and Russia.”

Commercial vehicles are likely to fare better, with Daimler expecting the North American truck market to recover in the second half of the year. The Stuttgart-based company said it expects a “moderate increase in revenue” from the division.

It added: “From today’s perspective, all operations should contribute to growth. (But) the regional focus of expansion is likely to be mainly in Asia and Eastern Europe.”

The group reported a net profit of 4bn euros for the year, despite a 2.2bn euro hit related to the sale of Chrysler.

Mercedes brings Hollywood glamour to Cobo with its ‘sexy’ Vision GLK compact SUV and upgraded SLK Roadster.

Mercedes brought Hollywood style to Cobo Hall when Sex in the City star Kim Cattrall and Daimler Benz Chairman Dieter Zetsche launched a new compact SUV, the Vision GLK.

The compact SUV has been labeled “sexy” after playing its own role in the forthcoming Sex in the City — The Movie. While not necessarily sexy, the SUV is refreshingly individual with its sharp lines, low hood line and bright interior styling. It has presence in a sector that doesn’t lend itself to eye-catching styling.

The GLK adds a fifth model to the Mercedes’ SUV range and offers customers a new entry point into the marque’s all-wheel-drive models. Two versions were introduced; the TOWNSIDE for “urban adventure” with a lowered chassis, more elegant streetwise design and sportier tires for on-road use and FREESIDE for more mixed on-/off-road driving.

Thomas Weber, board member for group research and development, said both Vision GLK models stand for new driving culture in their segment by offering “exciting design and compact format, distinctive driving enjoyment, both on and off-road; safety and comfort of the highest level as well as exemplary environmental compatibility.”

While the Vision GLK will be launched in January 2009 to the North American market with V6 engines and 4MATIC all-wheel-drive systems, it will eventually be offered with the BLUETEC diesel engines fitted to the show models.

The 2.2-liter engine delivers 204 horsepower and 369 lb-ft of torque at just 1600 rpm. Average fuel consumption achieved in testing is 35 mpg from the common-rail injection technology and two-stage turbocharging.

Mercedes also used the NAIAS for the worldwide debut of an updated SLK 350 Roadster. With an average market share of 30 percent, SLK has been the best-selling premium roadster of its class in the world since 2004.

It gets a more sporting look, enhanced interior and two new gas engines delivering more power than their predecessors, with a 10 percent improvement in fuel consumption. A new 3.5-liter V6 sports engine generates 305 horsepower (an increase of 33 horsepower) and gains an extra 2 miles to the gallon at 27 mpg.

The newly developed Direct Steer system with variable power assistance brings together agility and responsiveness on winding roads with greater ease during parking maneuvers and improved high-speed safety.