WARWICK, UK - The diesel car market in western Europe is rising again after four years of stagnation - and its share should increase from just under 25 percent last year to nearly 33 percent of total sales in 2003, according to a new market study.
Driving this increase will be new technology that confirms the superior economy of diesel, and a general reduction in the price of diesel cars in Europe.
Sales in 1998 passed a record 3.5 million across the region, although they are expected to soar ahead to reach 4.7 million by 2003.
'This will silence even some of the industry's most hardened skeptics,' said Peter Schmidt, researcher at UK-based Automotive Industry Data and compiler of Diesel Car Prospects to 2003, a comprehensive examination of 15 European markets between 1993 and 1998.
The trend has been sustained during the first quarter of 1999, when diesel cars accounted for 26.2 percent of the overall European market, with a peak in Austria of 57.6 percent of sales, and a 20 percent share in Germany, where diesels are subject to discriminatory taxes.
Schmidt said this was evidence that underlying diesel demand is rising.
He predicted EU diesel car sales would exceed 4 million in 2000 - rising to one in every three registrations three years later.
Diesel penetration will increase at all market levels, although the greatest growth is likely in the sub-B (Lupo/Arosa) and supermini (Polo/Clio/Punto) sectors.
Schmidt said diesel share in both these sectors remained low in recent years, held back by unconvincing cost benefits.
'The percentage of extra cost for basic or small-sector diesel cars was too high, tempting most low-mileage users of such small cars to opt instead for cheaper petrol versions,' he said.
'This is expected to change as carmakers increasingly target small diesel cars at this cost-conscious buying group. The extra costs of diesel will be gradually eroded away.'
Diesel's share of sub-B car sales, led by the 3-liters/100km fuel consumption target, will rise from negligible sales of 6,350 last year, to approach 90,000 units or 6 percent of sector sales by 2003, forecast Schmidt.
Supermini diesels will follow the same trend, rising from a 16 percent sector share last year to 23.4 percent in 2003.
Diesel versions accounted for 27 percent of lower-medium (Golf/ Astra) sector sales last year but will reach 30 percent in 2000 and advance to around 33 percent by 2003, mainly through the competitiveness of new PSA and Fiat Group common-rail diesel models, according to Schmidt.
Sales of Peugeot's 2001 307 diesel successor to the 306 diesel, which last year registered 158,500 across the region, will top 205,000 in 2003, he predicted.
Upper-medium diesels, already accounting for 34.9 percent of the sector, will exceed 42 percent in the same period.
Executive class diesels will increase with the arrival of new, powerful engines and could take 25 percent of this market by 2003.
Schmidt said: 'Technology-wise, nearly all passenger-car diesels sold during the early part of the next millennium will be direct-injection while three- and four-cylinder units will be fueled by either conventional rotary pumps, unit-injection systems like Pumpe-Duese, or common rail.
Virtually all six- and eight-cylinder diesels will be based on common-rail systems.'
There's less prospect for growth in the UK diesel market than other European countries.
The UK government has committed itself to taxing diesel more heavily than gasoline while it is in office.