For the next 10 years or so very few manufacturers marketed diesel-powered cars in the United States, says Kevin Riddell, automotive analyst for J.D. Power and Associates.

"VW was a great example," he says. "They had diesel on the market for several years, and without a significant amount of advertising, they have cultivated a dedicated group of enthusiasts among their drivers who continued to buy their TDI diesel cars."

If preconceptions about diesel were a gut punch for the fuel, California's strict emissions requirements delivered the knockout.

Those rules, which were adopted by several other states, prohibited any new sales of the old-style diesel engines because the soot they belched turned out to be a major smog producer.

"Without California and the states that follow their rules, automakers were locked out of a huge part of the market," Linkov says.

By the 2007 model year, all but a tiny handful of new diesels were finally pulled from the market.

But that didn't mean the manufacturers were abandoning the technology. Rather, Linkov says, they were redesigning their engines to comply with the strict air pollution rules.

"At this point, the U.S. is essentially a completely virgin market for diesel," Reed says.

J.D. Power and Associates expects Volkswagen to remain the largest global supplier of diesel-fueled light vehicles in the coming years, followed by Ford Motor Co. and Mercedes-Benz.

New fuel, new engines
With pioneering engine technology and a new ultralow sulfur blend of diesel fuel -- mandated by the Environmental Protection Agency -- which became available in most areas last year, carmakers think this is the time to try another push into the diesel market.

Taking advantage of the cleaner fuels, manufacturers have come up with a few tricks to make their engines clean enough to pass the California standard.

For example, Mercedes' engine uses a urea-injection system to capture the soot and scrub out the exhaust. The urea is a liquid that must be replenished at every oil change. Urea is a nitrogen-rich, synthetically produced organic compound. Commercially it is used as a chemical foundation for things like fertilizer, cleaning solvents, and in this case, exhaust scrubbers. Urea injection, also called Selective Catalytic Reduction, or SCR, involves squirting urea into a special catalyst to reduce emissions of oxides of nitrogen.

Volkswagen took a different approach. Instead of scrubbing their exhaust with a liquid, they designed a trap that captures the particulates before they are released into the air. Then, when the trap gets near to being full, the car's computer changes the fuel mixture to run hotter and the particulate is dumped back into the engine, incinerating the pollutants.