Diesel car sales set to overtake petrol

Manufacturing News, Source : TheManufacturer.com
Published : 30 Jan 2006 22:51

Sometime this year, sales of new diesel cars in Europe will overtake their petrol-driven counterparts.

The latest quarterly pricing survey by PricewaterhouseCoopers and eurocarprice.com shows that diesels accounted for 49 per cent of the total European car market at the end of 2005. Diesel is now set to overtake petrol as the primary fuel for new passenger vehicles in Europe during 2006.

Prices for diesel cars continued to rise more quickly (by 3.5 per cent a year) compared with those for petrol cars (3.2 per cent) in the final quarter of 2005, although the overall rate of price increases slowed as sales weakened. New car sales fell in 13 out of the 19 countries covered by the survey. Overall, average prices at the end of 2005 were 3.4 per cent higher than a year ago, while the total market was down by 0.6 per cent.

Chris Hibbs, UK Automotive leader, at PricewaterhouseCoopers said: “Although diesel car sales will undoubtedly outstrip those of petrol in the coming year, the debate continues on the ultimate level of penetration they will achieve. They could potentially achieve 55-60 per cent of the total market but the extra costs of making diesels to meet tougher emissions requirements means buyers will still have to pay a premium over petrol versions. Fuel prices will be another factor. Demand for diesel models tends to be higher in markets where there is the largest price difference between petrol and diesel. Varying levels of diesel fuel taxation between countries will always be a constraint.”

According to PwC’s European new car price index, the most expensive car market in Europe is Denmark where new car prices are 91 per cent higher than the eurozone average. The least expensive is Switzerland, where new car prices in the last quarter of 2005 were eight per cent below the eurozone average.

New car prices in the UK rose slightly faster than the European average in the last quarter of 2005 - at an annual rate of 3.9 per cent. Overall, the average price of a new car in Britain is two per cent higher than in the euro currency zone.

UK new car prices rose despite declining sales in nearly every market segment and body style, which saw the total market dipping more than four per cent below the previous year. Even sales of MPV models, which had been strong, fell. Only SUV sales surged ahead.

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