Why General Motors is Offering a Diesel in the 2018 Chevy Equinox

By Markets Fool.com

Chevrolet global brand chief Alan Batey took the wraps off the all-new 2018 Equinox in Detroit on Thursday. The new crossover, which replaces one of GM's best-sellers, goes on sale in the first quarter of 2017. Image source: General Motors.

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General Motors (NYSE: GM) took the wraps off its all-new 2018 Chevrolet Equinox this past week. It's the hot-selling model's first full redesign since 2009, and it brings a host of welcome improvements -- along with a new option that might seem puzzling: a diesel engine.

Why is GM introducing a diesel crossover now?

A year after the bombshell revelation that millions of diesel-powered Volkswagen (NASDAQOTH: VLKAY) vehicles were programmed to cheat on government-emissions tests, the technology isn't exactly in good repute here in the U.S., at least when it comes to passenger vehicles.

To be fair, while many European buyers choose diesel engines, diesel-powered cars and crossovers have never had a significant share of the U.S. market. While diesels accounted for about 20% of the VW brand's U.S. sales before the scandal, VW has always been a niche player here, never close to the market-dominating presence it has in Europe and China.

GM has recently had some modest success with a diesel-powered version of its compact Cruze sedan, which uses an engine sourced from GM's European operation. But while GM will be happy to sell diesel-powered Equinoxes to American buyers (perhaps attracting a few disgruntled VW owners along the way), the decision to offer the new crossover with a diesel isn't really about the U.S.: While the current Equinox is sold only in North America, GM says the new Equinox will be offered in over 100 markets around the world.

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So what's all-new about the Equinox?

Everything. For starters, it's four inches shorter and 400 pounds lighter than the outgoing model, but it has an additional 3.5 cubic feet of interior space. It's built on a new vehicle architecture, called "D2XX" in GM-speak, that underpins several other recent GM vehicles, including the well-regarded Buick Equinox crossover.

The redesigned interior of the all-new 2018 Chevrolet Equinox. Image source: General Motors.

Its exterior design is somewhat similar to the current model's, but sleeker and more up-to-date. The list of high-tech options is long, and includes GM's latest 4G connectivity suite as well as several advanced driver-assist features.

All three of the new Equinox's engine choices are turbocharged four-cylinder units. The choices include 1.5 liter and 2.0 liter gasoline engines as well as the 1.6 liter turbodiesel.

Is the Equinox a big deal for GM?

It sure is. After the huge-selling Chevy Silverado pickup, it's GM's next-best-seller in the United States. It's right in the sweet spot of one of the world's hottest market segments -- compact crossovers -- and the current model has had a good reputation and enjoyed strong sales.

Another view of the all-new 2018 Chevrolet Equinox. Image source: General Motors.

But despite a refresh last year, the outgoing Equinox is long in the tooth, having first been introduced in 2009. Buyers have noticed: U.S. sales of the Equinox have slipped significantly in 2016, down almost 18% through August from a year ago.

It's still GM's second-best-seller in the U.S. despite the recent slide. But clearly, it could be doing a lot better -- and that's the mission of the new version.

So when will it arrive at dealers?

Soonish. GM said that the 2018 Equinox will go on sale in the U.S. in the first quarter of 2017, and that it will roll out to "approximately 115 additional global markets" later in 2017. Like the current model, the new Equinox will be built in Ontario, Canada.

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John Rosevear owns shares of General Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.