QUOTE(Tango @ Aug 1 2008, 10:50 AM)

Lexus are at least three years behind German diesel technology and I don't believe they'll waste R & D money attempting to catch up. Putting a slightly modded diesel engine from the Toyota Avensis into the second generation IS bodyshell was a blatant attempt to capture some of the European diesel fleet market. To some extent they succeeded, as there are certainly more 220D's on the road than 250's in the UK, but it was a poor response to the German dominance of that particular sector and sales of the 220D are tailing off now people realise the shortcomings of its engine.
BMW have now announced plans to release their diesel variants in the US market, a wise move now the Americans have woken up to the fact that the gas guzzlers have a limited future. Had Lexus had the foresight to develop a diesel engine worthy of the Lexus brand name, they would have had the opportunity to compete with BMW in this their biggest existing marketplace, but with their only diesel being an old design 2.2, no chance. European sales are relatively insignificant to Lexus, the only saviour to any kind of Lexus diesel technology would be a commitment to develop a new engine for the US market, but with the lead the German manufacturers have I'd say Lexus will cut their losses and look to the future with hybrid.
I do believe the diesel engines on the German cars are more advanced, but I think the main problem with the 220D as well as the 250 is that the car is just too heavy. This inevitably hinders the performance, economy and CO2 emissions of the model compared to other cars in the same class.
The same could be said if you compare the IS 250 with the 325i. The 325i has the bigger engine, gets to 60 in over a second quicker than the 250, and still returns a combined MPG of 39, where as the 250 has a combined MPG of 29 with a smaller engine and worse performance. Does this mean Lexus will drop the 2.5l V6 as well? Doubt it, as well as I doubt it will drop the diesel version (It might have not met their expectations, but it has certainly boosted the sales of the IS considerably). Only an effective hybrid alternative would make both the petrol and diesel obsolete, however I don't see this happening anytime soon...