By on February 18, 2010

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.”

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27 Comments on “Are Europe’s Diesel Days Drawing To A Close?...”

  • avatar
    Bruce from DC

    This just serves as yet another example of what happens when demand for a product is the result of government taxation and/or subsidies: the whole marketplace begins to be driven by government policies, rather than by economics. Left to its own, the market price of gasoline and diesel oil should be fairly close for the equivalent energy content (diesel oil has more energy per unit volume than gasoline). Then consumers would make powerplant decisions based on what makes sense to them (primarily economics). Here in the U.S., with diesel priced on the street between 89 and 93 octane gasoline, its hard to justify the price premium of a diesel engine for most cars, unless the driver anticipates a lot of highway miles (where the diesel beats even hybrid powerplants). That’s why BMW is putting $4,500 on the hood of every 3-series diesel offered for sale here.

    The longevity and durability of the 4, 5, and 6 cylinder Mercedes automotive diesels of the 1980s has given the engine a good name. But everyone realizes that these all-mechanically controlled engines are stone age, compared today’s electronics-driven diesels; and the reliability/durability of the latter aren’t proven.

    Then, of course, there’s the ill-fated dieselized gasoline engines of the 1980s, from Audi (the 5-cylinder in the 100), Volvo (a 6-cylinder sourced from VW) and VW (the 4-cylinder in the Golf/Rabbit), not to mention the abominable diesel V-8s from General Motors. People probably remember them, too . . . and not fondly.

    There’s no question in my mind — having driven some of the European diesels — that the vices of the diesel powerplant (noise, smell/smoke, slow startup) have largely been cured. So, for me, and, I think most buyers, it’s a matter of simple economics: is the cost premium justified?

    That’s really the way it should be, in my opinion, without the government’s hand on the scales.

    • 0 avatar

      It makes sense if fuel economy is your most important criteria for purchasing a car. Compare any two cars offered with both powertrains and you’ll see a 25%—30% increase in fuel economy with a Diesel engine. Putting $30 of fuel in both, and the Diesel will take you that much further.

      Unfortunately times are hard for Diesel right now as in terms of emissions controls. Diesel technology is at a place very much like Gasoline cars were in the 70s and 80s. They are being strangled by (what will be seen as early) attempts to clean up their emissions.

      The “Highlander Fallacy of Technology” is also at play here, where people (especially pundits) assume that “there can be only one”. Marketplaces are not zero-sum games. Gasoline’s role as the sole motivator for automobiles is coming to an end. Has to come to an end. Will come to an end IF gasoline is to survive. There is plenty of room for any manner of drivetrain technologies and like I’ve said so many times before having choices can only make the long-term outlook for petroleum-based propulsion better.

      If Diesel were to be abandoned by automakers, along with the R&D required to get it through the present state to the next stage of its evolution, then the entire industry will suffer the loss of a viable option for the future.

  • avatar
    Paul Niedermeyer

    We’ve been predicting this for three years: From 2008:
    And from 2007:

    • 0 avatar
      Dr. Kenneth Noisewater

      Beyond the durability and reliability of diesels (mine is approaching 422k mi), I enjoy the fact that I’m doing my small part to keep money out of the camelfcukers’ pockets .

      I’m def too lazy to install a WVO system though.

  • avatar

    I suspect the much improved mileage of petrol cars is at least partly responsible for this. You have to drive an awful lot to save enough on fuel to justify the diesel premium when the difference in consumption is so small.. Just 1-2l/100km advantage to the diesel when comparing two VW Golfs of similar performance for example.

  • avatar

    Definitely understandable why diesel is heading downwards – the servicing of such vehicles is quite costly as compared to a gasoline engine. I still have high hopes they’ll come to Canada though – I enjoy the fuel mileage and the way they drive.

    • 0 avatar

      Have you ever owned a Diesel powered vehicle?

      Half the cars I’ve owned in my lifetime have been Diesels, and to date they have been far more reliable, cheaper to maintain and operate than my gasoline-powered cars. Not one has ever had an expensive, engine-related repair. Ever.

      I wish I could say the same for my gasoline engines!

  • avatar

    The adoption of diesels in the US will be the better yardstick, I presume (due to lack of subsidies pushing people towards diesel).

    Yes, the cars sell at a premium, and yes, it does benefit people who drive a lot of highway mileage…this probably makes more sense on a widespread scale in the US than it ever did in Europe. So I’ll be curious to see if VW/Audi/BMW/Mercedes efforts will continue to pay off (~40% of new Jettas are tdi now?). Nearly half the new Merc SUVs I personally see are Bluetec/cdi models.

    And the one key feature that will allow me to consider diesel in my next car: Highway torque = driveability. Put your foot down in top gear and the power is easily available while returning much better economy than an equivalently torquey gasser. I wouldn’t personally buy it for economics. I’d buy it as a nice compromise between a 4 and 6 cylinder car.

  • avatar

    Almost all cars above compacts in Europe are bought as diesels and that hasn’t changed. Only the proportion of small cars has increased.

    I don’t think you quite understand all the reasons why Europeans buy diesels. Let’s say you have a CUV or a mid size car which is quite heavy. If you want any kind of performance (and I am not talking about useless 0-60mph statistics but in gear acceleration instead) then you either get a big petrol engine or a smaller diesel (torque).
    In many European cities driving conditions are completely different to US and the American EPA numbers are not an indication of the consumption in Europe. Big petrol engines consume much more fuel in crowded small streets with heavy start stop traffic then on EPA cycles. Smaller turbo diesel is much better in these conditions.
    So getting 2.0 tdi passat instead of 3.2 V6 passat is a no brainer. Lately small turbo petrols have appeared which are supposed to be better (more torque lower in rev range, lower fuel consumption) but they are not yet really mainstream.

  • avatar

    The premium on mine was $1500 IIRC. Paid back in 24 months give or take, and I’m going into the eighth year of savings. Diesel or not, I’m sold on undersquare engines for life.

  • avatar

    Also from what I can read in this blog in US C02 is not taxed, displacement is not taxed, petrol is much much cheaper, cars are cheaper, streets are wider, parking places are bigger, you drive auto transmission so in gear acceleration is also not that important if the auto is quick enough to downshift. Why would anyone there buy a small diesel engined car is beyond me.
    Enjoy while it lasts, seems like automotive heaven to me.

    • 0 avatar

      But the cars are typically designed to that (more lax) standard, as well, so they’re not always as fun to drive. That’s why US cars have so often gotten a bad reputation. They were traditionally designed for what you described: Big engines, big cars, mediocre handling, etc. That’s why most enthusiasts yearn for European or Asian cars that are designed to a more demanding standard of usage.

      With an average 15,000 miles per year driven, per car, the incremental improvement in efficiency across ~250 million cars would make an incredible difference in our total consumption. And most people buying 4-cyl diesel engines would be replacing a 6-cyl car (similar “real life performance”)

    • 0 avatar

      If your idea of heaven is an over weight, inefficient, soft handling SUV then yes this is the best heaven ever made!

      However if you want an efficient, sharp handling, engaging drive but with sufficient space for your family & stuff then the choices are limited, in which case Europe heaven all of a sudden looks brighter.

      The reason people would buy a diesel is

      1. they like the extra torque of the diesel
      2. they like the extra fuel economy of diesel
      3. they saw the way the American public reacted when the price fuel topped $4 gal and every thing is tell us that the price of oil will head that way again (the question is when)

  • avatar
    Robert Schwartz

    Depend more on natural gas from Russia. What a brilliant idea.

  • avatar


    Fun that you mention lower total consumption. In Europe governments sometimes try to ensure that. In America it seems nobody ever does judging by the SUV size and the improbable number of the fantastically decadent land yachts Paul keeps feeling his CC’s with. Though it is always such fun to read them, like tales from fairy land not on this planet. In fact CC’s with those cars are so much like cartoons.


    No, not an SUV but it looks like buying and living with a BMW M car would be very much easier in US. I did go a little bit too far with mentioning parking space size I admit :)

  • avatar

    OK, explain to me how much simpler a hybrid is than a diesel when getting the same mileage for a bigger car (Prius vs. Jetta). Funny, to me, my ’03 Jetta seems as simple as a hammer.
    And when my wife recovers from her hip surgery, I’m planning to lend her my ’03 Jetta, so she won’t have to row the manual tranny like she has to with her gutless, torqueless (whirr,whirr!) Corolla.

    • 0 avatar

      OK, explain to me how much simpler a hybrid is than a diesel when getting the same mileage for a bigger car (Prius vs. Jetta). Funny, to me, my ‘03 Jetta seems as simple as a hammer.

      HSD hybrids have a very simple transmission. They don’t have a high-pressure fuel rail. They don’t have to deal with a turbocharger. They don’t have to deal with diesel emissions. They don’t have to deal with forced-induction levels of pressure and stress. They don’t wear through brakes as quickly.

    • 0 avatar

      While I admire the brilliant technology of the HSD system, I call BS on any assertion that it is more simple than any CRD Diesel system.

      Let’s be realistic and honest here.

      2 independent motors and extremely complex (bug prone)software to manage them as a system? Regenerative brakes? Cooling and charging a battery for 10 years of useful life? Turbocharging is decades old. High pressure fuel rails are on all modern EFI vehicles.

      I could continue…

  • avatar

    Great torque. Perfect combined with automatics. Better efficiency.
    But there is another thing that is pro diesel. Peak oil. To distill lots of gas from oil requires a good sweet crude. When oil becomes more scarce and therefore much more expensive in the future it will be easier to squeeze more drops of diesel out of low quality crude. Low qulity crude that will be shoveled up from the ground.

  • avatar

    LPG is a great fuel. Almost any petrol powered vehicle can be converted, and the running cost is much cheaper than diesel. LPG has been popular in Australia since the 1970s although CNG is only used by buses. Australia is a major natural gas exporter (in LNG form) so it makes sense for politicians to realise the potential for further cutting our oil import bill.

  • avatar

    I think TTACs predictions are a little premature. Sure there has been a drop due to increasing market for economy cars but Europe’s love affair for diesel is undiminished. Just like America’s infatuation with SUVs and CUVs isn’t about to stop any time soon.

  • avatar

    My Jetta has a 5 speed (wouldn’t have an auto, much less a VW auto tranny), simple as it gets. And if your hybrid doesn’t have a tuned and charged engine, it’s an inefficient engine. FWIW, a Brit car mag had a drive off from London to Zurich between a Prius and 500 series BMW diesel with plenty of goodies. The BMW beat the Prius for MPG even tho the Prius driver wasn’t using the AC, the radio, etc.
    I see electric being the choice for short (<15 Mi) commutes and the diesel for everything else. The hybrid, with great complexity, attempts to bridge the two…and you end up driving a video game.
    Watch out for the blue screen of death………

  • avatar

    Some dissing on hybrids going on here; I guess they’re a prime target with Toyota in the news of late.

    So all I’ll say is this…

    I’m coming up on 6 years and 95,000 miles. No brake failures, no accellerator failures, no crashes, computer or otherwise.

    And I haven’t needed a brake job yet, hehe, those ripoff artists (by that I mean just about anybody who does brakes by not cleaning the sliding parts yet they don’t hesitate to shave a little extra off those rotors).

    I might very well buy another Prius, just to avoid having to have brake jobs. There’s your break-even point right there!

  • avatar
    A is A

    “Europe’s longtime infatuation with oil-burners…”

    I am not “infatuated”. I am deeply in love with Diesels. Mature love, not “infatuation”.

    Europe´s love history with diesels started in the 1980s, with the appeareance of cars like the Peugeot 505 or 205 Diesel. An “infatuation” does not last 25 years.

  • avatar

    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?

    • 0 avatar

      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.

  • avatar

    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.

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