the VM 2.8 in the jeep is a nightmare in australia , if you want one you will not have to pay much to get one . The big Lcrs 4.2 or 4.5 will tow well , the earlier versions will tell you not to tow in 5th , good advice as the gear cant handle it very long( although you are looking at auto which is reliable , but has a tendency to hunt between gears when on long climbs) . If you use all the power and get a move on you can get down round as low 12mpg , Ive done it with an emergency response unit !
i used a 300tdi 130 defender DC HCPU extensively in australia quite frequently at its GTW of 7450KG , it handled it well , managing 25mpg and cruising at about 100kmh on the flat , slower uphill and quicker down
The tdi engines do require a bit of a rev to get off the mark ( the auto a ZF unit (very good) tends to mask this as you can just boot it and the torque converter does the rest) , noticeable compared with my 110 V8 , which will go from tickover clutch engagement and just press the accelerator to get the amount of torque you require but your then looking at 15mpg in comparison thats why i just re-engined it with a 3ltr BMW TD for european use.

The cherokee tends to be a bit weak in the rear axle bearing area , but the 4 ltr hemi petrol engine is a very nice unit , with a long life. , but again being petrol a bit juicy .

good info there tacr2man, what is the issue with the VM units in Australia ?

My mate had a 2.5 VM Cherokee in the 90's and it was a good engine, much better than the old Range Rover engines and far better than the Td5. Ive owned an older 4.0 litre straight 6 gas Cherokee in Canada and that engine by design is prone to head gasket failure, the older style Cherokee is not a good tow vehicle either - its too light and has weak leaf rear suspension.

In North America VM have been pretty good, the 3.0 CRD Jeep Grand Cherokee's are quite sought after, the latest DodgeRam/Jeep 3 litre Ecodiesel is a VM unit - although its CRD it looks to be a well made engine, getting some good reviews so far - but its only been out a few months.

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Cheers
Grif

'11 KTM 450 EXC
'09 Suzuki DR650
'00 Discovery Series 2 V8
'95 Defender 90 300 Tdi Overlander
http://gipperstravels.blogspot.ca

In the past two years I have owned a 2002 TD5 and a 2002 2.7cd grand cherokee, discos not very refined slow always needed something doing to it, the GC is faster by a country mile more economical 35mpg at 60mph no probs, uses the merc 2.7 engine is an auto with all the toys. Disco feels steadier on the road but I fitted an uprated anti roll bar from usa which made a big difference to the grand cherokee. havnt needed to do anything to the GC yet nice to drive bit ponderous at speed but then so are most jeeps. The disco is bigger and the air suspension was a bonus but only if its working. Both vehicles have their fare share of issues and parts are easily available for both really comes down to personal preference, having said that I wont be going back to a landrover too much hassle.