Almost 80% of Japanese buyers order the new Mazda2 with a SkyActiv-D engine.

Nearly two years after the maker had originally hoped to begin offering a diesel version of its SkyActiv engine system in the U.S., Mazda Motor Co. is getting close to making a final go/no-go decision, senior executives said during a luncheon meeting in Detroit.

In the wake of the Volkswagen diesel emissions scandal, Mazda planners are concerned about future demand for the high-mileage technology. Ironically, a Japanese version of Mazda’s SkyActiv-D powertrain has proven far more successful than expected, diesels now accounting for more than 70% of the maker’s home market sales.

The question is whether the emissions scandal has damaged the German maker’s image or diesel’s image, said Robert Davis, Senior Vice President of U.S. Operations for Mazda North America. “We think the damage is to Volkswagen, but we’re still deciding” whether there’s enough demand for Mazda to finally launch a U.S. diesel.

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Mazda had originally slated the SkyActiv-D launch for the beginning of the 2014 model-year, then pushed it back to the spring of that year before putting it on indefinite hold.

The initial reason for the delay was technical, company officials said. The challenge was to come up with solid performance while meeting tough new NOx and particulate emissions rules – all the while delivering the sort of fuel economy diesel buyers would expect.

While Mazda has yet to sell a U.S. diesel, it did score well with a racing version of the Skyactiv-D.

The engineering challenge was all the more frustrating because VW had been able to find that solution – at least, so it seemed until it was revealed by the U.S. Environmental Protection Agency last September that the German carmaker had used a so-called “defeat device” to rig its emissions tests.

U.S. diesel sales have taken a sharp hit since the subterfuge was discovered, though much of the decline reflects the fact that Volkswagen was the largest marketer of “oil-burners” in the American market, with its 2.0- and 3.0-liter turbodiesels accounting for about a quarter of its total sales.

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Nevertheless, some senior executives are skeptical whether demand will rebound.

“If you like at industry data, you see little opportunity to be successful with diesel engines in the U.S.,” said Masahiro Moro, the CEO of Mazda North American Operations.

That said, the same might have been the reading of the Japanese market until recently. Diesels have traditionally accounted for barely 1% of that country’s passenger vehicle sales, but the figure has nearly doubled since Mazda launched a home market version of the SkyActive-D.

That 1.5-liter powertrain is used across the line-up, from the little Mazda2 to larger products like the Mazda6, as well as various crossovers. And on some products, it now accounts for more than 80% of demand. Overall, diesels power 70% of the vehicles Mazda is now selling in Japan, noted Moro. And the Hiroshima-based maker accounts for about 50% of total Japanese diesel volume which has nearly doubled since the launch of the SkyActiv-D.

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