April 17, 2011 5:19 pm

European carmakers see diesel progress in US

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European carmakers are at last gaining traction in their decades-long campaign to persuade American car buyers to switch from petrol to diesel.

Volkswagen boosted sales of diesel models 46.2 per cent last month compared with a year earlier, more than double the increase in its overall US sales, the German carmaker told the Financial Times.

Demand for some VW diesel models now outstrips supply. “The challenge for us is getting them from the factory,” said a VW spokesman. LeaseTrader.com, a car-leasing service, reports that searches for Mercedes-Benz, VW, BMW and Audi diesel models on its websites have risen markedly in recent months.

Diesel-powered models make up only about 2 per cent of cars and light trucks on US roads, compared with more than 50 per cent in Europe.

Proponents have fought an uphill battle aimed not only at promoting a technology, but changing a mindset that has long associated diesel with smelly, noisy and expensive vehicles. General Motors helped sully diesel’s name during the oil crisis in the late 1970s by converting the petrol engine of an Oldsmobile model to diesel, with disastrous results. The converted engines were notoriously prone to breakdown.

The recession and the jump in fuel prices have provided a fresh opening to persuade American motorists that their cars will last longer and use less fuel if they switch to diesel.

According to Sergio Stiberman, LeaseTrader’s chief executive: “More people today are searching for diesels because of the improved mileage they can get.” He added that the attraction of diesels has been bolstered by “very strong” residual lease values. The latest models comply with stringent emission standards in all 50 states.

A narrowing gap between diesel and petrol prices has also helped. The average diesel price last week was five cents a gallon more than premium petrol, compared with a 60-70 cents difference during the 2008 oil price rise, according to the AAA motoring organisation. Diesel pumps have become more accessible. According to the Diesel Technology Forum, diesel is now available at 52 per cent of retail fuel outlets, up from a third in 1999.

VW is sufficiently confident that the tide is moving in its favour that its new plant in Tennessee, opening later this year, will build a diesel version of the Passat mid-sized sedan.

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