early years of this century, Peugeot dominated the American racing Scene, winning the Indianapolis 500 in 1913, 1916, and 1919.

In 1958, Peugeot decided for the first time to market automobiles n this country, and introduced the 403 sedan, which was called by the motoring press "one of the seven best-made cars in the world." Since that time we have sold three other models in this country, the 104, the 304, and currently the 504 in both sedan and station wagon. In 1972 Peugeot produced 671,139 vehicles, ranking as the 13th largest automobile manufacturer in the world. We export about 50 percent of our total production to some 163 countries.

Returning to the diesel, Peugeot installed its first diesel engine in a passenger car in 1923. Needless to say, it was a very temperamental engine. Peugeot, however, recognized the potential of the diesel and, hrough the years, our research engineers have continually worked to mprove our diesel engine.

In 1959, Peugeot laboratories presented a highly evolved version of the original diesel engine, a light-duty engine which eliminated most of the negative aspects of earlier diesels.

It is basically this same engine which is used in Peugeot autonobiles today. Since 1959 we have produced 459,294 engines of this ype. And, last year alone, nearly 80,000 Peugeot diesel cars were old throughout the world.

Today, our diesel engines power not one, but six different models f Peugeot automobiles: The 204 station wagon; the 404 sedan, the 04 station wagon, the 404 pickup, the 504 sedan, and the 504 sta

on wagon.

Until a few years ago, Peugeot felt that its diesel automobiles were unsuited for the American market, mainly because their perormance did not measure up to that of similar size conventional asoline cars.

Then, because of added emission control devices, we watched the erformances of the conventional gasoline car drop lower and lower. uddenly, our diesel engine automobile became a very realistic conender on this market with performances similar to many gasoline utomobiles which will be built to meet the 1975 and 1976 standards. Two recent events finally convinced Peugeot's top management to troduce the diesel in the United States:

First, the possible extension of the 1975 emission standards which ill allow us greater freedom and time to focus our research on the esel engine.

Second, the testimony of Mr. Ruckelshaus before your Commison in April of this year, which suggested the possibility of a 1976 Ox standard revision.

I would now like to describe quickly the principal features of our esel engine.

The Peugeot light duty diesel which powers our 504 sedan and ation wagon models is called Indenor XD90. It is a four-cylinder gine displacing 2.1 liters and generating 65 horsepower/DIN at 500 revolutions per minute with an aluminum alloy cylinder head nd a Bosch injection system.

Thanks to the swirl chamber method of combustion which I menoned earlier, as well as other improvements developed by our en

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gineers, we have eliminated most of what the general public considers the negative aspects of the diesel engine.

We believe today that the XD90 engine meets the standards of Peugeot's traditional high quality and reliability. Our 504 diesel, well-tuned, shows outstanding driving comfort. Odor and smoke problems have been largely eliminated thanks to injection calibra

tion.

The noise level has been dropped to a level lower than that of many small compact cars; and when compared to the noise level of the 504 gasoline engine, the diesel was found to be : 4 dB (A) higher at idle; 2 dB(A) higher at 31 miles per hour; similar in noise level at 50 miles per hour and 62 miles per hour; 2 dB(A) higher at 74 miles per hour.

In other words, there is today essentially little difference between a well-tuned Peugeot diesel automobile and the conventional gasoline car as far as noise, odor, and smoke are concerned. This is an extremely important factor to emphasize on the eve of our introduction of the diesel in this country.

Earlier, I mentioned briefly the performance of the diesel-powered car. We do not expect that diesel automobile will win the Indianapolis 500 or the 24 hours of Le Mans. But, in 1973, aren't Americans beginning to accept that our highways should be functional, clean and safe rather than showplaces for speed?

The 504 diesel has a maximum speed of 84 miles per hour. The acceleration time for a 504 diesel is 23.6 seconds for zero to 60 miles per hour.

Prices for any marketed product are an important factor. A diesel-powered car will always be costlier than a comparable gasoline car. The fuel injection system, inherent to all diesels, is an expensive item which is reflected in the selling price. However, in Peugeot's 50 years of marketing the combustion-ignition engine. evidence has shown substantial long-range savings for the diesel

owner.

Three factors account for this economy: First, the maintenance. A diesel engine is considerably less complex than a gasoline engine. It is an engine with no ignition system and no carburetor, which eliminates the need to replace spark plugs, points or condensers.

Secondly, the durability. 150,000 miles is a very normal life expectancy for a diesel engine.

Third, and particularly critical today, fuel economy. When tested in accordance with the DIN 70030 test method, the 504 diesel delivered approximately 30 miles-per-gallon, as compared with ap proximately 23 miles-per-gallon for the 504 gasoline engine employ ing the same test method.

Fuel economy is a crucial issue not only because the diesel averages more miles per gallon, but also because the imminent energy crisis threatens a substantial rise in gasoline prices, and as emission standards get tougher, gasoline consumption in the conventional engine with present and projected emission control technology may well increase dramatically.

Let me now discuss the exhaust emission of the disel engine, which is one of its major advantages over the conventional gasoline engine.

As I mentioned earlier, the diesel engine is inherently cleaner than any gasoline engine. The following are the results of three tests made recently by three separate emission control laboratories on 504 diesels selected at random from our production line for Germany and without any special tuning or devices which would have altered the emissions.

First, our Peugeot control bureau in testing several vehicles found average grams-per-mile emissions of HC, 2.2; CO, 2.5; and NOx, 1.3. Secondly, an independent laboratory testing a 504 diesel found levels of HC, 1.33; CÔ, 2.29; and NOx, 1.23.

Finally, tests by the EPA in the United States on our car showed HC, 3.11; CO, 3.42; and NOx, 1.07.

Additional adjustments and refinements of our basic diesel engine are currently under active investigation by our engineers both here and in France. On the basis of the research done thus far, we are confident that a substantial reduction in hydrocarbon emissions can be achieved without great difficulty.

We are hopeful that with additional time and effort, the XD90 engine will be able to meet the 1975 interim standards, and ultimately the 1976 clean air standards, with the exception of the oxide of nitrogen. But, as I mentioned earlier, we are hopeful, from Mr. Ruckelshaus' testimony a month ago, that the 1976 standards for the NOx emissions will be revised. Such a revision is essential to the future of the Peugeot diesel in this country since it currently seems almost impossible to foresee a method of dropping oxide of nitrogen levels close to the 0.4 grams-per-mile requirements for 1976.

From a marketing point of view, our faith in the success of our diesel in the United States is based on a history of considerable success in selling diesel-powered automobiles throughout the world. Since 1959, when the first combustion-ignition engine of the type used today was introduced by the Peugeot laboratories, we have produced close to one-half million of these engines. In the last 5 years, our annual diesel production has jumped from 25,574 to 78,894; 12 percent of our entire 1972 production was diesel powered; and in Germany alone, our sales of diesel automobiles more than doubled between 1971 and 1972.

Success with the diesel has not been exclusive to Peugeot. Several other European and Japanese manufactures have been concentrating their efforts on this engine. In Paris, 70 percent of the taxicabs are powered by diesel engines. In Lisbon, taxis are 75-percent diesels. And in London, all those familiar Austin cabs are diesel-powered. To summarize, I would like to emphasize that Peugeot's decision to introduce the diesel engine in this country has been motivated by three factors: the established success of this engine in other countries; the current American energy crisis; the hoped for revision of the 1976 NOx emission standard.

Consumer reaction and the future revision of the NOx emission standard for diesel engines will determine the extent and magnitude of our diesel venture in this country.

Before I conclude, Mr. Chairman, I would like to mention that Peugeot has recently introduced a new light-duty diesel enginethe XL 4D, which is being installed on the 204 station wagon. This

is a remarkable new version of our basic diesel, a 4-cylinder, 1.3 liter displacement diesel engine delivering 45 horsepower/DIN at 5,000 revolutions per minute, with overhead camshaft and swirl chamber combustion method. The cylinder block and cylinder head are of aluminum alloy construction with cast iron cylinder liners.

In addition, this engine is mated directly with an all aluminum front-wheel-drive gearbox differential.

The qualities of the XL 4D are exceptional. Unfortunately, however, it is barred from this country since our model 204 does not meet a number of the Federal safety regulations in its present form. Let me only point out that: its weight is only 42 pounds heavier than the model 204 gasoline engine; its HC and CO emissions are slightly lower than the 504 diesel engine, with its NOx level remaining similar; and, most significant, its fuel consumption is approximately 40-miles-per-gallon when tested by the DIN 70030 method.

Mr. Chairman, I mention this XL 4D mainly to emphasize Peugeot's engineering expertise and experience in the diesel engine. Our engineering teams are constantly working to improve the emission quality and the performances of our diesel.

I personally believe that the diesel-powered automobile is right for this country today.

I would like to emphasize, however, that despite our enthusiasm for the diesel, we know that it is only one solution to the problems of environmental protection and energy conservation, and not the only solution.

Our engineers are working diligently day and night, and we are confident that we will build a cleaner gasoline engine, the engine that has been the backbone of our industry for decades, and which we believe will remain important to our commercial future in the United States.

Mr. Chairman, it has been an honor and a privilege to speak today in front of this committee, and I would like to thank you for inviting Peugeot to this hearing.

I will be happy to answer any questions you may have. I will let Michael Grossman, our technical director, answer any technical questions.

I would like to end by saying that today we did want to bring a diesel engine, but in spite of its good characteristics it is very heavy. We have downstairs two diesel Paugeots, and if you wish to take a ride in them, you are welcome to.

Senator MUSKIE. Thank you.

First of all, I would like to endorse two statements that you make. Mr. de Montmarin. The first one, you say:

I would like to emphasize, however, that despite our enthusiasm for the diesel, we know that it is only one solution to the problems of environmental protection and energy conservation, and not the only solution.

As one member of the committee, I would like to say we are not limited to only one solution to these problems. Let me say in addition that I would hope as we pursue various solutions that we bear in mind the potential long term requirements and not the minimum short term requirements that we may be forced to accept because of

the limitations of technology and market adaptability. That is where the committee's frustrations develop.

Second, I like the standard which you lay down. You say:

But, in 1973, aren't Americans beginning to accept that our highways should be functional, clean and safe rather than showplaces for speed?

I think they are, if those who manufacture the cars would give them a chance to respond to their own commonsense instincts about what we do with our highways and how we behave on them. But if our manufacturers continue to be tempted by American consumer's present, perceived preoccupation with speed, comfort and convenience, we are not going to give any opportunity at all for those instincts to rise.

I will ask 2 or 3 questions and then yield.

First of all, on the NO, point, there is a statement made in your technical presentation that seems to go farther than you go in your oral testimony. I read it from the fifth page, I think it is.

Oxides of nitrogen, the main element in photochemical smog, are a problem in diesels as well as in gas engines, but if a precombustion chamber is included in the head design the problem is much reduced. It probably can be eliminated. Most efforts now are being directed towards turbocharging as a means to clean exhaust.

That is a much more optimistic statement than you made in your testimony and a much more optimistic evaluation than we received from the previous witnesses. I wonder if you would want to explain that?

Mr. GROSSMAN. I might address myself to that question. The one thing we would like to clarify the statement in "Why the Diesel." This is something that was prepared a bit earlier than the current analysis. It was prepared about 6 months ago for some other purpose. These were statements taken from an article in the August 1972, issue of Air Progress Magazine concerning the advantages of diesel for use in light airplanes. As you know, technology is constantly changing, and at that time this was the opinion of some people, definitely the fellow who wrote this whom I happen to know quite well personally. He felt that the precombustion method was a direction that could be moved in perhaps a little bit better for NO, control than our swirl chamber design.

Senator MUSKIE. Is that the considered view of the company on the potential for cleaning up the NO, problem?

Mr. GROSSMAN. No. We view now that if we changed our methods to the precombustion method, it might in the long run prove slightly cleaner for the NO, level, but the amount of reduction is very, very small as compared to what the swirl chamber method produces, as you can see from the test results. We feel, as our colleagues from Mercedes do, that there is an inherent problem in the diesel combustion process which limits the amount by which you can reduce the NO, levels.

As Mr. Buckley mentioned, it is a problem of not being able to add a catalyst for NO, because of the very low inherent carbon monoxide.

Senator MUSKIE. Let me ask, what is your company's attitude toward the catalyst as the long term answer, technologically? This is with regard to ÑO, and all the other emissions?