MERCEDES-Benz has led the way in offering diesel-engined luxury saloons in the UK. Now BMW has caught on and is to offer a 3.0-litre diesel version of the new 7-series for the first time in the UK. Simon Harris reports Diesel fever has gained momentum in the fleet market over the past few years, and now seems the only way of running a tax-effective executive company car. But until now only Range Rover and Mercedes-Benz have been brave enough to test the water in the UK in the luxury car sector.

However, the penny now seems to have dropped with rivals. Perhaps company chairmen increasingly believe a diesel luxury saloon sets a good example to other staff, or the number of chauffeur companies who want to reduce running costs has increased.

In that particular sector the passenger is unlikely to care how the car is fuelled and there is no stigma for the paid driver.

While the Mercedes-Benz S-class has a choice of five petrol variants and one diesel, recent figures show that 56% of buyers choose the diesel.

However, in markets where drivers and governments have looked upon diesel more favourably than in the UK, Mercedes usually offers more than one diesel option.

Meanwhile, Audi will be bringing diesel to the UK with the new A8 next year, while Jaguar is hoping to benefit from Ford's diesel development partnership with PSA Peugeot-Citroen, and diesel versions of the new Volkswagen Phaeton will be available from its 2003 launch.

This must be ramming home the message to those privileged enough to choose such cars that performance and refinement need not be sacrificed by choosing diesel, and the running costs benefits are a key factor when these cars are run as part of a company fleet.

Although BMW has sold diesel versions of previous 7-series models in these other markets, the company is now ready to tackle the UK for the first time with the new straight six 730d.

There is also a new V8 740d, but unless there is sufficient demand from UK customers to justify a right-hand drive conversion, this particular diesel will not reach our shores.

As this is a new area of the market for BMW in this country, the company is, perhaps modestly, predicting that the diesel will account for 25% of 7-series sales in a full year. This could also be because there will be two more petrol variants to come before the range is completed – a 3.0-litre six-cylinder and a 6.0-litre V12.

And the 7-series, BMW would argue, is a slightly different type of car from the S-class, with a more 'sporty' nature that would lead to fewer sales to chauffeur companies.

The car uses a development of the 3.0-litre common rail diesel already used in the 5-series, 3-series and X5.

However, it has increased in capacity to 2,998cc from 2,903cc and is fitted with a second-generation common rail injector. Power is increased from 193bhp to 218bhp, and torque is up from 317lb-ft to 369lb-ft at 2,000rpm.

The car also benefits from the latest six-speed automatic transmission, which made its debut in the 735i and 745i petrol models earlier this year.

The 730d will be the least expensive model in the range so far, with prices expected to be about £44,000 for the base car and £46,000 for the SE. This is less than the 735i (£52,750 on-the-road) but it also does without a number of items found as standard on the petrol car.

So wave goodbye to headlamp wash, Dynamic Drive (electronically switching from comfort to sports suspension on demand), 18-inch alloy wheels, satellite navigation, integrated telephone, a six-CD autochanger and special hi-fi system. However, choosing the SE adds the navigation system, phone and alloy wheels.

Behind the wheel

I would be surprised if the latest 7-series won any beauty contests. Its deliberately challenging styling is – rather like caviar – an acquired taste. Some will love its striking and incongruous combination of straight edges and curves, while others will think it looks a mess.

While I don't believe the car is a mess, when the competition is made up of the sublime styling of the Mercedes-Benz S-class, the unfussy lines of the Audi A8 and the classic good looks of the Jaguar XJ, the BMW does seem to be the odd one out. The rear boot lid of the 7-series looks like it could have come from an entirely different car. However, the interior is less fussy and, thanks to the i-Drive console, is clutter-free with only essential switches across the dashboard.

The i-Drive system does take perseverance before it becomes intuitive. On the launch event, it took about 10 minutes (as a front seat passenger) to change the display from German into English, and then the procedure for resetting the trip meter completely eluded me. Otherwise the Seven feels like a BMW, with a standard manual shift option using buttons on the steering wheel. The 3.0-litre diesel sounds familiar, too, with the distant, truck-like rough edge on start-up quickly disappearing and settling down to a six-cylinder whisper. BMW's column stalk gear selector is probably the easiest to use in the entire motor industry and the 730d wafts away gently on a wave of torque.

Engine noise is barely detectable unless the transmission is prompted to kickdown after jabbing the throttle and then it is hardly intrusive. Acceleration is strong, and the 7-series feels remarkably light on its feet, with sharp, weighty steering and powerful, responsive brakes. With 369lb-ft of torque from 2,000rpm, the 730d will gain speed rapidly for overtaking, despatching slower traffic with ease.

The vehicle on the launch event was fitted with Dynamic Drive (optional on UK diesel variants), and there was a perceptible difference in the ride when switching between comfort and sport settings, with more bumps and ripples on the road being felt in the cabin when the system was in 'sports' mode. For a true assessment of the differences in handling between the two settings, you would probably need to take the 7-series to the track, so I see no real reason to opt for Dynamic Drive when the diesels come to the UK.

Something else that won't be coming to the UK is the 740d – at least unless customers make enough noise to persuade BMW GB to import it. Just so you know, the V8 engine is even quieter than the six-cylinder motor in the 730d, under acceleration it has the deep burble of a petrol V8 and is faster, but a little less economical than the 3.0-litre diesel. There is probably very little difference between driving the 740d and the 745i, with the main distinction coming in the fuel bills.

Driving verdict

The 730d is a more sensible choice for running costs than a petrol 7-series, although the petrol cars are class-leading for fuel consumption. The diesel offers ample performance and drivers should easily attain more than 30mpg. If the boss hasn't switched to diesel yet, then the time could soon be right.