The automaker will introduce the diesel version of the Chevrolet Cruze compact on Thursday at the Chicago Auto Show.
Volkswagen, which offers diesels in a number of its cars including the Jetta compact sedan, gets almost 18 percent of its sales from diesel-powered models. Last year, the German automaker's U.S. sales rose more than 30 percent.
"We expect to beat the Jetta in terms of price, features, range, even horsepower and torque," said Gary Aultman, chief engineer for Chevrolet small cars.
With the diesel Cruze, GM will sell both performance and gas mileage. Diesel engines usually are about 30 percent more efficient than gas motors because they compress the air-fuel mixture at a higher level. They also have more power at lower speeds, allowing faster acceleration.
The Cruze, made in Lordstown, Ohio, has been a good seller for GM. During some months of 2011, it was the top-selling compact in the U.S. But that was largely because Toyota and Honda factories were hobbled by an earthquake and their dealers ran short of cars. GM sold almost 238,000 Cruzes last year, a 2.6 percent increase over 2011.
UNDER THE HOOD: A new two-liter turbo diesel with 148 horsepower and ample power at all engine speeds. The car initially will be sold only with a six-speed automatic transmission, beefed up for the diesel's higher power. GM says the diesel will go from zero to 60 mph in 8.6 seconds, which the company says is better than the Jetta with an automatic transmission.
GAS MILEAGE: At least 42 mpg on the highway. City and combined mileage testing not finished yet. An eco version of the gasoline-powered Cruze also gets 42 mpg on the highway with a manual transmission, but GM says it doesn't perform nearly as well as the diesel. "You're getting a little tiny performance sedan with superb fuel economy," says spokesman Tom Read.
INSIDE: Chevrolet's MyLink touch-screen system is standard. Leather-appointed seats.
OUTSIDE: Aerodynamic improvements, 17-inch alloy wheels, low rolling resistance tires, rear spoiler.
PRICE: Starts at $25,695 including shipping. It's a hefty premium over the base gasoline version, which starts at $17,940, and the eco with automatic, which starts at $21,685. Goes on sale in May or June.
CHEERS: Gas mileage and diesel engine experience. Even though GM hasn't had a diesel model in the U.S. since 1986, it made more than 500,000 diesel cars across Europe, Asia, Africa and South America last year. Forty percent of European Cruzes have diesel engines.
JEERS: Price. The diesel is about $4,000 more than the gas-engine eco version, and the mileage is comparable. Price is also comparable to Jetta diesel with automatic transmission. Also, diesel Cruze has less trunk space than gas-engine Cruze due to diesel pollution controls.