The diesel engine once seemed ready to have a long reign in the European auto market, seducing buyers with a promise of delivering superior fuel economy and intoxicating torque. Multiple factors caused diesel demand to dip sharply last year, - but experts say the powertrain should not be counted out just yet.
Diesel sales are forecast to fall less sharply in 2018 because automakers still need to keep a high percentage of diesels in their lineups to meet carbon emissions requirements, currently 130 grams per km of CO2 for the European fleet.
"I don't see a drastic reduction in diesel in the next couple of years but a steady decline," said Pietro Boggia, principal consultant at Frost & Sullivan, who is predicting that diesel sales will fall two to three percentage points in 2018.
Al Bedwell, director of global powertrain research at LMC Automotive, expects diesel's market share in 2018 to be just under 42 percent, a decline of three percentage points. "The automakers will need to push diesel sales until 2020 to meet their CO2 targets. The curve is flattening a little bit," he said.
Jose Avila, who is head of Continental's powertrain division, said the supplier isn't panicking. "One should remain pragmatic because the situation has not changed dramatically. Our order book for the conventional powertrain is very healthy," Avila added.
The diesel's glory days were undone by tightening European emissions standards, consumer skepticism following the Volkswagen Group's emissions-cheating scandal and the threat from multiple municipalities to ban them from city centers.
From a market-share high of 55 percent in 2011 (versus 43 percent gasoline), diesel penetration in the 27 European countries tracked by JATO Dynamics has fallen to 44 percent through October -- the lowest share since 2003. The decline has been especially steep in the last year, falling five percentage points, according to JATO.
LMC Automotive, which tracks the market in 17 Western European countries, reported a diesel share of 42 percent in October, a seven-percentage-point swing from a year earlier. "It seems the diesel phenomenon is disappearing as fast as it appeared," JATO global automotive analyst Felipe Munoz said.
Automakers are scrambling to come up with a powertrain mix that will allow them to meet the next big emissions cut, that takes full effect in 2021, to a fleet average of 95g/km of CO2 -- a figure that nearly all agree will mean significant numbers of electric and electrified drivetrains. That means there will still be plenty of diesels available at dealerships, with automakers motivated to move them along.