FORTUNE — Volkswagen AG’s new Passat midsize family sedan this fall will tussle for buyers with formidable competitors like Toyota’s (TM) Camry, Honda’s (HMC) Accord, Ford’s (F) Fusion and Chevrolet’s (GM) Malibu.
Midsize sedans play in the the fattest, most important slice of the U.S. automotive market, one where companies fight the hardest to gain share. Thorough May, midsize cars comprised more than a half of all cars sold in the U.S. and more than a quarter of all vehicles sold, including minivans and sport utilities.
Passat has been in the U.S. since 1973, but in a size too small for shoppers of family sedans, The newly-designed Passat has one advantage over the others: an optional diesel engine. None of its peers offer diesel, giving the Passat a distinctive selling point, especially for road warriors looking for fuel efficiency and long lags between fill-ups.
The enlarged Passat, built at a newly-built factory in Chattanooga, Tenn., was designed specifically for American families and to steal customers from the current sedans, consistent with the German automaker’s self-proclaimed push to be the world’s top seller by 2018.
“We are keeping all the characteristics that will identify Passat with German precision and engineering,” said Serban Boldea, product marketing manager. Yet all models will include features like Bluetooth phone connection and dual-zone climate control that American consumers favor.
Gallery: 10 cutest cars in America
Engineering advances have made diesel engines much quieter than earlier versions, with none of the malodorous emissions that turned off so many drivers. German engineers have a point when they insist that if drivers seek fuel economy, diesel compares well against gas-electric hybrids on the grounds of simplicity and ease of maintenance.
The least expensive gasoline-powered Passat will start at a retail price of under $20,000. The least-expensive TDI Diesel will start at $26,000, rising in price to about $32,000 with frills such as navigation, larger wheels, sunroof and power seating.
VW finally has the car that earns consideration against some of the most popular family sedans on the road, especially those powered by hybrids. And with diesel, VW may get a second-look from consumers determined to squeeze every last mile from their fuel budget.
