Are Europe's Diesel Days Drawing To A Close?

Edward Niedermeyer
by Edward Niedermeyer

Diesel drivetrains have long been a crucial component to the European market’s forbidden-fruit appeal for American enthusiasts, ranking right up with station wagons and manual transmissions on the list of under-offered features in the American market. But there are signs now that Europe’s longtime infatuation with oil-burners might be drawing to a close (and not just for biodiesel). The Telegraph reports that Europe-wide diesel market share has fallen from 52 percent to 46 percent in the last 12 months, with the UK’s share dropping from about 43 percent to about 41 percent. Much of this trend is being driven by growth in the low-cost car segment, where the higher cost of diesels make them less competitive. Fears of higher repair costs for more complicated clean-diesel drivetrains and a relative undersupply of diesel fuel aren’t helping either. And just as diesel is faltering in its most important consumer market, the EU is eying a tax increase that Reuters UK says “could boost demand for gasoline at the expense of diesel.”

The EU identifies the same global reductions in gasoline demand (particularly in the US, where ethanol mandates are credited with reducing consumption) without a corresponding drop in diesel demand as its motivation for adjusting its tax scheme to favor gasoline. The current tax structure favors diesel, and an adjustment could interrupt refiners’ efforts to invest in diesel refining capacity.

But another gasoline alternative is gaining attention as Europe deals with a changing energy environment: natural gas, in both liquified petroleum gas (LPG) and Compressed Natural Gas (CNG) forms. Germany already subsidizes LPG at the pump, while other countries like Italy offer consumer credits on LPG- and CNG-powered cars. With North Sea oil reserves tapping out, rich supplies of natural gas from Norway and Russia could eat away at both diesel and gasoline market share in the future. But in any case, EU commissioners see any changes in diesel, gasoline and natural gas tax structures as a “mid-term” solution, and a “bridge” to eventual “decarbonisation of transport.”

Edward Niedermeyer
Edward Niedermeyer

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  • Accs Accs on Feb 19, 2010

    So wait a second... Is this somehow related to why US automakers wont offer diesel cars in the U.S? Honda was very close. Chrapsler wont offer the Jeep GC in the U.S But everyone else has been on the sidelines about offering diesel, even though the fuel is now cleaner in the U.S. This is on top of cars n the U.K are often costlier than U.S for the similar size. But what I also dont get.. is the companies who could do diesel the best MB / BMW and or VW have economies of scale in their favor. So how much could diesel add to the price of a VW polo / golf / gti car vs Gas?

    • 2ronnies1cup 2ronnies1cup on Jul 31, 2011

      I would say that the manufacturers with the most advantageous economies of scale would be Ford, PSA and VW, as they produce large volumes of commercial vehicles equipped with their diesel engines.

  • Joeaverage Joeaverage on Mar 08, 2010

    Thanks but I'll be buying one of those doubly or triplely undesirable cars next time 'round - a wagon, a manual, and a turbo diesel. Enter the diesel Jetta Sportwagen. Our aged CR-V would have been a much nicer vehicle with a VW like TDI. Don't get me wrong - we have enjoyed it with the little gasoline engine. I rode around town with a coworker in his huge turbo diesel pickup today. He commented that he really liked the rattling of his diesel engine and the fact that the truck and its Dodge and GM cousins are noisy and sound like a big rig. Ah, no thanks. I'll stick with the little Euro-oil-burners. For me torque is a great measure of a car's engine. I have no care about 0-60 mph. I also don't care about how much HP an engine makes. It's torque that tells me what a car is going to be like to live day to day. One of my 2.0L four cylinders makes nearly 150 HP at the top of the tachometer. It also makes very little torque. My other 2.0L makes less than 120HP but it is tuned so it makes alot of torque. MUCH nicer to drive under any condition. The same is true for a GOOD four cylinder turbo diesel vs a four cylinder gasoline engine and perhaps a V-6. The turbo diesel wins again.

  • Jkross22 When I think about products that I buy that are of the highest quality or are of great value, I have no idea if they are made as a whole or in parts by unionized employees. As a customer, that's really all I care about. When I think about services I receive from unionized and non-unionized employees, it varies from C- to F levels of service. Will unionizing make the cars better or worse?
  • Namesakeone I think it's the age old conundrum: Every company (or industry) wants every other one to pay its workers well; well-paid workers make great customers. But nobody wants to pay their own workers well; that would eat into profits. So instead of what Henry Ford (the first) did over a century ago, we will have a lot of companies copying Nike in the 1980s: third-world employees (with a few highly-paid celebrity athlete endorsers) selling overpriced products to upper-middle-class Americans (with a few urban street youths willing to literally kill for that product), until there are no more upper-middle-class Americans left.
  • ToolGuy I was challenged by Tim's incisive opinion, but thankfully Jeff's multiple vanilla truisms have set me straight. Or something. 😉
  • ChristianWimmer The body kit modifications ruined it for me.
  • ToolGuy "I have my stance -- I won't prejudice the commentariat by sharing it."• Like Tim, I have my opinion and it is perfect and above reproach (as long as I keep it to myself). I would hate to share it with the world and risk having someone critique it. LOL.
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