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More U.S. buyers choose diesel

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More U.S. buyers choose diesel

David Sedgwick

Automotive News Europe -- August 4, 2010 06:15 CET

Diesel-powered cars finally are gaining some sales traction in the United States.

When automakers offer car models with a choice of a gasoline or diesel engine, a surprisingly high percentage of consumers are opting for diesel.

Earlier this year, an R.L. Polk survey of car registration data revealed that more than 49 percent of VW Jetta sedans and wagons sold in the United States are diesels. And it's not just Volkswagen that attracts diesel devotees. Some 30 percent of Audi Q7 buyers, 18 percent of Mercedes GL purchasers and 17 percent of BMW X5 xDrive buyers chose diesels.

To be sure, the German marques tend to attract tech-savvy buyers who can afford to pay extra for diesels, and non-German brands have yet to demonstrate any similar successes.

Boost for suppliers

But if diesel-powered cars catch on in North America, a new market would open up for key component suppliers such as Robert Bosch GmbH, Continental AG, Delphi Automotive and Denso Corp.

Bosch predicts diesels will account for 10 percent of light- and medium-duty vehicles sold in the United States by 2015, up from 4 percent in 2010.

"We are very, very optimistic," said Lars Ulrich, marketing director at Bosch Diesel Systems North America near Detroit. "We have overcome the negative consumer image of diesels from the 1970s. Consumers are slowly realizing that diesels offer additional performance."

If U.S. consumers embrace diesels, Bosch would have much to gain. The company produces injectors, common-rail fuel pumps, engine control units, sensors and other gadgetry for the VW Jetta SportWagen, BMW 335d and Audi A3.

Traditional pickups

By contrast, Continental is betting on a more traditional U.S. diesel market: heavy-duty pickups. "We think that the market [for diesel-powered trucks] is constant," said Kregg Wiggins, Continental's senior vice president of North American powertrains. "People need diesels for towing."

Wiggins cites several factors that could limit the appeal of diesel cars.

First, gasoline prices haven't approached the $4-per-gallon record set in July 2008. Second, automakers are improving fuel economy by equipping small gasoline engines with turbochargers and direct injection.

Third, tough U.S. emissions standards will drive up the cost of diesels, Wiggins predicts.

Cold feet

The U.S. market for diesel cars will expand a bit when Mazda rolls out its Sky-D diesel in a mid-sized sedan - most likely the Mazda6 in 2012. But other automakers are getting cold feet.

In 2011, Nissan was supposed to equip the Maxima with a 3-liter V-6 diesel built in Europe. Those plans are on hold, a company spokesman says.

Likewise, Honda reportedly was developing a diesel-powered Acura TSX for 2011 plus an Accord diesel for late 2011 or 2012. The company won't comment, but industry sources say Honda's diesel program is dead.

Will anyone buy these cars? J.D. Power and Associates forecasts that 3 percent of passenger cars sold in the United States in 2015 will be diesels, up from less than 1 percent this year.

That's a decent niche but still small compared to Europe, where about half of new-car sales are diesels.

"In the U.S., diesels are still associated with heavy-duty pickups," says Mike Omotoso, J.D. Power's senior manager of global powertrains. "We think demand will grow, and this will spread beyond the Germans. But [demand] will remain small."

Read more: http://www.autonews.com/article/20100803/COPY/308049992/1135#ixzz0vdp5uJmi

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