GO
GoAutoLogo
MENU

Make / Model Search

News - Market Insight - Market Insight 2015

Market Insight: Diesel passenger cars on the wane

Opting out: Diesel passenger cars and compact SUVs are increasingly out of favour with Australian buyers, as Honda found out with its diesel Civic.

Diesel might be king in utes, but passenger car buyers increasingly look to petrol

6 Aug 2015

SALES of diesel-powered passenger cars in Australia are headed for their leanest year for almost a decade as relatively cheap petrol prices and increasingly efficient petrol engines realign buyer preference.

So far this year, sales of sedans and hatchbacks with diesel engines are down 25 per cent in a market segment down 3.3 per cent.

And while overall SUV sales are up 13.7 per cent to the end of July, sales of the diesel variety are lineball with the same period last year and have basically plateaued over the past three years.

On the other hand, petrol SUV sales are up more than 20 per cent.

Of course, the light-commercial vehicle segment continues as a diesel stronghold, with more than 87 per cent of all such workhorses sold in Australia last year having diesel powertrains.

Car manufacturers are reacting by considering the future of diesel in small cars and compact SUVs, where downsized, turbo-boosted petrol engines are returning fuel-economy figures once the province of turbo diesels.

At the same time, petrol engines are doing it with fewer emissions – a point that is not lost on European powers-that-be who are considering whether diesels should be phased out, at least in big cities.

The likes of Honda and Peugeot have dropped diesel small cars in their Australian line-ups, mainly because the sales uptake just does not warrant stocking them. Others who had been considering them have quietly shelved the plans.

Hybrids likewise have failed to set the world on fire, with sales of the Toyota Camry Hybrid as fleet cars and taxis largely keeping the sales graph ticking over, but in tiny numbers compared with conventional petrol.

Private sedan and hatchback buyers this year have bought 1588 hybrid cars, compared with 166,628 of the petrol type.

Apart from the born-again appeal of petrol in modern cars, the higher cost of diesel in the showroom is a big deterrent to buyers. For example, a diesel Ford Mondeo Ambiente costs precisely $4000 more than the petrol equivalent.

Many buyers choose to put that $4000 towards the extra fuel that the EcoBoost petrol engine will sip, while at the same time enjoying the extra zip, quietness and cleanliness of the petrol powertrain.

Diesel passenger car sales peaked at about 45,000 vehicles a year between 2010 and 2012, before dipping to 36,680 in 2013, then 30,414 in 2014 and – on the current running rate to the end of July – about 25,000 this year.

Diesel SUV sales might hit record levels this year, but only because of healthy growth in medium and large SUVs where diesel dominates. And even if the market achieves our prediction of about 130,000 units this year, it will represent an increase of only about 2000 on the levels of 2013, effectively meaning a decline in diesel’s share of the SUV market.

Just two years ago, oil companies in Australia were predicting long-term growth of 4.0 per cent a year in diesel fuel sales, just as diesel family car sales started to slip.

About then, the fuel retailers were in a rush to install new diesel pumps at service stations.

Ironically, just as diesel appears to be dipping in Europe and Australia, the United States finally appears to be embracing the fuel that hitherto has been largely restricted to trucks in North America.

An Autonews report from Detroit suggests diesel light-vehicle uptake is predicted to rise from the current 3.0 per cent to 7.0 per cent by 2020.

General Motors recently became the first mainstream manufacturer in the US to introduce a diesel engine in a light ute, the Colorado.

Read more

Click to share

Click below to follow us on
Facebook  Twitter  Instagram

Market Insight articles

Motor industry news

GoAutoNews is Australia’s number one automotive industry journal covering the latest news, future and new model releases, market trends, industry personnel movements, and international events.

Catch up on all of the latest industry news with this week's edition of GoAutoNews
Click here