What was said above.
The 1973 Arab Oil Embargo was quite a shock. And it was only the first.
1980, the year I graduated high school, was the midst of a multi-year recession. As noted above, for decades diesel fuel was substantially
cheaper than gasoline -- that hasn't been the case now for several years, but diesel's cheaper price combined with greater economy proved a powerful attraction to a segment willing to put up with sluggish performance, cold-start issues, smells and smoke, and the premium cost for the diesel powerplant.
Diesel cars and light trucks were pretty quirky back then, and you had to be something of an individualist to take to one. This is in contrast to today, where diesels are marketed entirely differently than then.
In late '75, my father bought his first brand-new car, a Peugeot 504D Wagon. French cars take even more getting used to (my first car was a 1958 Simca Aronde). His second was a '83 Chev G30 van (diesel), then he bought the '77 MB 240D and later a '93 F250 diesel -- he's still got the MB and the Ford. Yeah, he's an individualist all right, is my father.
In 1977, GM responded to declining horsepower and falling sales figures for its fleet (except maybe the Vega) by doing a half-ass job of converting a very reliable Oldsmobile gasoline V8 to diesel, and selling them as an economical alternative. I have firsthand experience with them, because my boss at the time bought one of the very first Chev C10 (1/2T PU) with the new engine, and we used it in a rental equipment business, with only three of us driving it. I was a teen and drove the snot out of it, and it was fine. That was a plain-jane 1978 model. Next year, boss bought another one but decked-out for his personal use. Both ran great. Had a bit of oil leakage at the valve cover gaskets.
The the next year (1980), he bought a Cutlass diesel for his wife, a luxo version with T-tops. Very nice car to drive, it did have the famous governor failure under warranty on a trip.
The '79 C10 developed a bad vacuum valve at the IP, so his trans wouldn't upshift right. Out of warranty, I fixed it in about 1982.
The first one, the 1978, we sold in about 1980, and the new owner blew two engines in a year. Maintenance. 'Nuf said.
None of those three Olds 350 diesels gave us much trouble. However, ours was not the typical experience. They got good mileage, over 20 MPG in the trucks, around 25 in the Cutlass: they're all very heavy vehicles with poor aerodynamics common at the time.
Head gaskets blew. Crankshafts broke. Injection pumps failed. TTBOMK, that covers probably 80% of the problems. But the word got out: diesels were unreliable.
GM made
five major revisions to the Olds 5.7l (350 CI) diesel engine from 1977 to 1985, with the last one being a pretty good engine IMO. As recently as 2001, I bought one (an '82 Cutlass Wagon) for a friend of mine, and it had the GM replacement engine: "TargetMaster" is how they were labelled. It's still running, though my friend just passed away two weeks ago. The trans did die, but that has nothing to do with the engine.
Anyway, the American public's perception of diesel was radically changed by that period. VW and Peugeot and MB had niche diesels in the 70's; GM's entree into the market made the others think that perhaps they could sell their diesels here too, hence the Nissan 720 and Maxima diesel variants. By 1983 though, the news was all over about how unreliable diesels were (even GM couldn't make a good one
) and sales of diesels in the US dropped off radically. Strangely enough, that was when Ford and Dodge entered with the diesel F250 (late 1983, IH engine) and the D2500 (Cummins). They sold pretty well, as did the smaller Chev 6.2l in the truck line -- a Detroit diesel derivative, IIRC: the 5.7l and 6.2l share no parts.
Hope this helps.
