The nation's largest auto makers, General Motors Corp. and Ford Motor Co., are beginning the greatest debate over engine design since the 1930s when Ford made the V-8 famous and Chevrolet stuck six-cylinder engines.

This time the debate is over diesels. GM is turning to diesel engines to solve the fuel economy and exhaust emission problems imposed by federal regulations. GM sold its first diesel car last year and plans to produce 160,000 of them in 1979. GM officials say diesel power may be the only way to keep full-size cars on the road.

Ford, in contrast, sells no diesel cars and has relegated diesel development to a back burner. The Ford in your future probably will be powered by a modified gasoline engine that Ford engineers call PROCO.

Chrysler Corp. is on GM's side, but a couple of years behind in developing diesels. Chrysler recently introduced its first diesel, a pickup truck powered by an imported Mitsubishi engine.

All the American auto companies are taking their diesel lessons from the Germans, who invented the engine, pioneered its use in passenger cars and proved diesel cars could be sold successfully in the United States.

Mercedes-Benz sold more diesel than gas cars in America this year and predicts 60 percent of its 1979 sales in this country will be diesels. Mercedes' gas/diesel ratio in the U.S. is just the opposite of its worldwide mix, which is 58 percent gasoline engines.

Volkswagen diesel's swept the top three places in the Environmental Protection Agency mileage tests for 1979 cars. A diesel Rabbit with a five-speed transmission, a diesel Rabbit with a four-speed and a diesel Dasher were rated at 41, 40 and 36 miles a gallon in city driving.

The only cloud in thd diesel's future is the one that comes from diesel exhausts, an oily, black fume of carbon particles, oxides of nitrogen and other chemicals.

General Motors engineers admit they don't know how to meet the diesel exhaust emission standards the EPA wants to impose for 1983, but they say the prospects for increasing fuel economy make it worth tackling the exhaust trouble.

More threatening that the EPA standards, however, are laboratory tests that indicate some of the chemicals in diesel fumes produce changes in cells that could cause cancer. If the laboratory tests are confirmed by actual evidence that diesel exhaust is a carcinogin, it will doom not only the diesel car but also the millions of diesel-engine trucks now on the road.

Diesel trucks have given the engine a reputation for reliability that Detroit marketers believe is more important that the notorious diesel smell and noise; engineers think those problems can be whipped.

Diesel cars use a different type of diesel engine than trucks, a "pre-chamber" design that eliminates much of the diesel clatter and smoke while retaining the engine's desirable characteristics.

The big difference between diesel and gasoline engines is that diesels have no spark plugs and no caburetors. Instead of using a spark plug to ignite a fuel and air mixture provided by the carburetor, diesels inject fuel into the engine and make it explode by compressing it under great pressure. Diesel engines have a compression ratio of about 22 to 1 compared with 8 or 9 to 1 in today's gasoline engines.

Higher compression requires a stronger block, which is heavier and costs more money. GM's diesel Oldsmobile is about 500 pounds heavier than the same car with a gasoline engine and costs $750 more. A diesel Rabbit costs an extra $200. But engineers say the cost difference will diminish as new emission controls push up the cost of gasoline engines and larger production runs trim the price of diesels.

The primary diesel advantage is fuel economy - a 25 percent gain over a comparable gasoline engine, General Motors diesel specialist Frederick Bowditch said in a recent briefing on diesel development. GM's 350-cubic-inch diesel gets 21 miles per gallon in a full-size Oldmobile, while the comparable gasoline-powered Olds settles for 17 mpg in EPA's city driving cycle.

GM puts that same Olds diesel in Cadillacs and small pickups and will offer a smaller, 260-cubic-inch diesel in the Olds Cutlass. "We're looking at a whole family of diesels," Bowditch said.

About 60,000 1978 diesels were sold by GM, and the nation's biggest auto maker has planned to produce 190,000 1979s and between 250,000 and 300,000 1980 cars. By 1985, diesels could power 11 to 25 percent of General Motors' cars.

The GM diesels will go into big cars to bring down the fleet average gas consumption. GM can't sell enough 30-mpg Chevettes to balance all the big cars its customers buy, so it has to improve the mileage of its big cars to meet government energy-saving goals.

Although Chrysler has yet to sell its first diesel car, the company already is using diesel fuel economy figures to project its fleet average figures for the 1980s and beyond.

"The diesel is going to be a growing part of the mix" of engines used by Chrysler, said engine development engineer L.B. Mann. "There are quite a few people who feel we will be heavily diesel . . . 10 to 20 percent is a distinct possibility by the 1990s."

Chrysler has diesel cars running now, is working on refinements of present diesel technology as a short-term solution to its fuel economy needs and is doing long-range research on basic diesel development.

Both Chrysler and GM are converting their existing gasoline engines to diesels. The Olds diesel and its gasoline-burning counterpart have very few interchangable parts, but they can but built with the same machine tools and on the same assembly lines so a switch to diesels will not require major outlays for tooling.

Only at Ford do auto engineers argue with the optomistic outlook for diesel cars.

"It is not a front-burner priority for us," said spokesman Robert Harner. That doesn't mean Ford isn't studying diesels, but it means Ford engineers think they have a better idea - an engine they call Proco, for Programed Combustion.

Ford's Proco is related technically to the CVOC engine used by Honda, utilizing a diesel-style pre-chamber and a sophisticated fuel system to control combustion, minimize gas consumption and eliminate pollutants. "Proco is a gasoline version of the diesel," said Harner. "It has high compression and fuel injection but with spark plugs - and the same kind of fuel advantage as a diesel with none of the problems."

Ford engineers do agree that an alternative to the conventional gasoline engine is needed. "If you're going to save the big car, it is going to have to be diesel or Proco," said Harner.

Diesel's difficulties, as Ford sees them are "poor startability, poor acceleration, the odor, the noise and the particulate problem."

Neither GM or Chrysler engineers argue with that list, but say none of the difficulties are insurmountable. "Diesel fuel economy is so good that other problems are worth solving," said Chrysler's Mann.

Diesel drivers don't just jump in, turn the key and motor off. On GM's cars, they twist the key a quarter turns - activating glow plugs that warm up the engine - and wait for a light to go out before starting the car. GM says it has cut the waiting time from 60 seconds to 6 seconds when the temperature is zero.

GM uses to batteries in its diesel cars to get the extra power required for the glow plugs and the heavier starter needed to spin the high-compression engine.

A diesel puts on 10 to 20 percent less power than a gasoline engine the same size and doesn't accelerate as freely. As a result, "You usually need a larger displacement diesel," said GM's Bowditch. Mercedes' latest solution to the leisurely performance of its diesels is a turbocharger that kicks in for acceleration, but that is considered too costly and too complex for a mass-produced American car.

Chrysler says it's had some success dampening diesel noise by redesigning the combustion chamber to get less explosive burning. The other cure is to wrap the engine, passengers or both in enough sound insulating material to eliminate noxious noises. Even the $25,000 Mercedes diesels sound like they're coming apart when they first start, but once warmed up, the GM diesel in a Cadillac Seville can barely be heard inside the car and ticks quietly to outsiders.

Diesel odor is part of the exhaust emission problem. The real hangup, however, is not what diesel drivers smell but what they see.

Smoke and particulate emissions are such a minor problem with gasoline engines that EPA doesn't set standards for them, but diesels put out dozens of times as much visible pollution, so the government is cracking down. Diesel emission standards go into effect in 1980 and get tougher over the following three years.

Detroit's diesel engineers describe the particulate standards as "very harsh" and "unrealistic."

The two most talked about solutions are exhaust gas recirculation (EGR) - in which part of the exhaust is routed back through the engine to burn off pollutants - and traps or filters similiar to catalytic converters.

Neither works quite right yet, especially in high-mileage cars. Nor does Detroit have a good way to eliminate the oxides of nitrogen in diesel exhaust which contribute to smog.

But those are the kind of tactical problems automotive engineers get paid to solve once top management has set the strategy. If nonpolluting diesels are what it takes to save the big American car, the auto industry will find a way to make them.