We have installed 1.9 liter turbo diesel engines in seven Vanagons that were already diesel powered, except for one which started out its life as a 1985 gas model. The engine that is easiest to install is the AAZ engine code type. It is 1.9 liter and turbo charged like the TDI, but is not a TDI. Instead, it is the earlier generation and simpler "pre-chamber"-type with no electronic controls. This power plant puts out about the same torque (120 ft-lbs.) as a stock 2.1 liter waterboxer, but only about 75HP instead of 90HP. They get about 25 mpg on the highway if driven conservatively. I have a 1990 Doka Syncro that had one of these engines in it, and when driven "normally" I get around 22 mpg. The TDI is a way better engine (about 160 ft-lbs. and 90 hp) and more fuel efficient, but extremely complicated to install with all the electronics involved. On top of that, the TDI has the turbo mounted below the intake manifold, so when it is leaned way over to fit into a Vanagon, the oil won't drain out of the turbo. So, you have to convert the turbo and exhaust manifold to a different type (there are ways to install the engine straight up and down using an adaptor, but the resulting height of the engine creates clearance issues with the engine lid, worse on 2WD models). On top of that, you have to run an intercooler... all of which make the TDI a very difficult and expensive installation, indeed.
Basically, the negatives to installing a diesel engine in your Vanagon are vibration, gearing requirements, and cost. There is no way around the vibration. In-line 4-cylinder engines are not harmonically balanced as are flat-four engines (water boxer), so they vibrate a lot more. That is just the nature of the beast. You can expect about 10 times more vibration as compared to a waterboxer. The cost is high, especially given the gearing requirements. A proper AAZ 1.9 turbo diesel engine installation alone into an already diesel-powered Vanagon is about $7500. Then, on top of that, the gearing in the transaxle needs to be MUCH taller than for the waterboxer or stock 1.6 diesel in order to fully take advantage of the 1.9 liter torque and fuel economy. For a 2WD, the best choice is a 5-speed with a 4.57 final drive, and a .70 5th gear. That puts the engine rpms at about 3000 @ 70mph. The cost of that gearbox is several times more than a standard 4-speed box. And, you can expect to have to last about half as long due to the much higher torque the diesel can produced at a much lower RPM.
Now, I love diesels. I own or have owned all sorts of VW and Mercedes diesel powered vehicles, and love my Kubota diesel tractor. So, when I purchased my first Vanagon in 1996, a 1987 Wolfsburg Weekender, I was dead set on making it diesel powered. The first thing I did was buy a complete TDI engine and wiring harness for it. I built that super high-geared 5-speed for it like I describe above (which is still in it) in preparation for the TDI conversion. In the meantime, we did the six aforementioned diesel installations and started our more powerful and more efficient waterboxer program. Long story short, the TDI engine sat on the shelf for about three years. Based on the knowledge we had gained from doing the six simpler non-TDI diesel installations and the success we were having with the waterboxer program, I just could not fathom the work it would take to do a correct, good-as-factory installation of a TDI in a Vanagon. I ended up selling the TDI, and installing a 2.4 in my Vanagon, which was the best water boxer we had available at the time. We now offer a 2700cc water boxer—and that is what I run in all my Vanagons. The fact of the matter is that any of our larger waterboxers run just fine down the road at 65 mph and get 16-20 miles per gallon at that speed. Granted, the MPG is not as good, but the power is way better compared to an AAZ, it is as smooth as glass, and takes just one day to install. ONE DAY. We have built thousands of waterboxers for customers all over the world with great success. And since a fresh GoWesty waterboxer engine can be installed in just one day, the cost including installation is really reasonable. Our waterboxer engines also come with a 48 month/48,000 warranty. Okay, it's not a diesel, I know. And that's a bummer, I agree. But hey, there are a lot of other things to worry about that are much more worthy of our limited capacity for anxiety...
There are several companies offering in-line gas or diesel installation "kits." From the ads you’d think they install in a weekend, are simply turn-key, and are fool-proof perfect. Yeah, right. Granted, these "kits" are much better today than they were a decade ago, but they are by no means a slam-dunk solution to the perceived shortcomings of the original powerplant. Now, keep in mind, we at GoWesty have done seven turbo-diesel in-line four cylinder engines in Vanagons, all of which (except for one) were already set up from the factory with that type of power-plant. My Doka diesel was already a factory 1.6 TD, so the installation of the 1.9 TD was not too much work. Even still, I went through five exhaust system designs. The thing just kept rattling them apart! Good thing I love working on my own vehicles. It's fun, right? Well, no. Not always! One of the best technicians we ever had at GoWesty put a TDI in his 1986 Vanagon Syncro. He is experienced, smart, and talented. Even his TDI conversion is a constant work-in-progress. He tinkers with it all the time, and still the bugs just keep coming! Believe me, we're speaking from experience, diesel engines are not simple to install, are not trouble-free, and are certainly not "turn-key." If you have the time, tools, talent, and experience, and simply must have a diesel, go for it. But don’t be surprised when the thingamajig won’t fit where it's supposed to and the whatchamacallit keeps rattling off!
Need any more convincing? I, the owner of GoWesty, finally gave up and replaced the turbo diesel in my own, personal DOKA with one of our 2700cc water boxers! I have barely opened the engine lid since!
Now, if you already have a factory installed diesel engine in your Vanagon that needs to be replaced anyway, and it has a tired gearbox, it just doesn't make sense to overhaul what’s there. Going with taller gears and updated shifting system, and a fresh 1.9 turbo diesel instead of just overhauling the original trans and 1.6 non-turbo engine makes a lot of sense. You might spend twice as much, but you would have 4 times more vehicle to show for it when done. On the other hand, you might consider just swapping it over to waterboxer power.
That's our story, and we're sticking to it.