Navistar and Ford had a 4.5L V-6 Turbo Diesel ready to go at the same time as the 6.0L Navistar in 2003. Navistar built a new plant for the V-6, but Ford backed out and paid a large settlement.
Ford claimed it didn't meet their requirements, but the "story" was that Ford marketing killed it because they figured it would siphon off higher margin sales of the 250/350 with the V-8 Powerstroke. When 70% of every 250/350 was getting a diesel, people appeared to be willing to pay the upcharge for the Super Duty truck AND the engine meaning more profits. Also, the F-150 would have needed some beefing up of the front end to support the weight of the diesel - so it would have been more like an "F-175".
At this point, diesels just don't make economic sense unless you NEED the torque. The addition of aftertreatment filters, EGR, and other emissions controls has driven up the cost and reduced fuel economy. Couple that with diesel fuel prices that are now equal to or higher than gas instead of cheaper as they were a few years ago and earlier and it's a no-win situation. The extra cost of the engine is never paid back by the fuel savings. There is a durability argument, but the higher level of technology and complexity in new diesels means more things that can go wrong.
Remember that Europe does not currently require aftertreatment filtration on passenger cars - they went straight to SCR injection so they haven't seen some of the cost increases yet.
That is changing with the Tier4i industrial engines requirements in Europe, US/Canada, and Japan. Starting in 2011, off-road diesels in all of these markets are phasing in aftertreatment filters and EGR just like the 2007 and later on-road engines in the US. The phase-in schedule depends on the hp rating of the engine.
While Biodiesel is laudable, it offers no economic advantage and thus will not drive the market the change unless it become a regulatory requirement.


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