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Nissan's diesel Maxima plans in doubt

Nissan revealed its U.S. diesel plans almost two years ago, but uncertain emission regulations and worsening economic conditions could be derailing those plans. Nissan planned to launch its first clean-diesel powerplant in the 2010 Maxima sedan.

Nissan first announced its intentions to offer a diesel option in the 2010 Maxima back in April of 2007, but the market has seen a tremendous shift since then. Fuel prices have decreased significantly over the last two years with the recent collapse of new car sales making it hard to justify a model expansion. Uncertainties surrounding Californi's emissions regulations are also causing Nissan to pause.

"We haven't reached a decision on the diesel yet, but we have to consider where we want to put our capital investments," Larry Dominique, Nissan's vice president for product planning, told Automotive News. "We have to consider that the market for diesels will be too small to warrant the investment right now."

Dominique added that under Californi's proposed regulations, automakers would have to sell two zero-emissions vehicles for every one diesel-powered vehicle.

Although development of the diesel mill is complete - the oil burner earmarked for the Maxima will be sourced from Renault - Nissan will still have to foot the bill of converting the engine for U.S. emissions regulations. Considering how tight funding is right now and the limited market for diesel cars, the 2010 Maxima diesel could be DOA.