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April 28, 2010

EUROPE: Diesel penetration set for comeback

Diesel car penetration in Western Europe will bounce back over the coming months according to research form Datamonitor.

Diesel car penetration in Western Europe will bounce back over the coming months according to research form Datamonitor.

It says the rising diesel penetration rate will be driven by a temporary rise in the share of the market taken by bigger models and luxury cars.

Having grown continuously since 1990, the share of diesel cars among new car sales in Western Europe declined sharply between 2007 and 2009, falling from 53% to 46%. This was largely due to the recession and incentives such as car scrappage schemes, which tilted the balance of favour of smaller petrol-powered cars. However, as these schemes come to an end, diesel car penetration looks set to recover – in the short term at least.

Anuj Chandna, automotive analyst at Datamonitor, said: “The share of diesel cars among new car registrations in Western Europe enjoyed uninterrupted growth for 17 years, rising from a meagre 14% in 1990 to more than 53% in 2007, largely due to factors such as the lower price of diesel fuel in most European countries, improved fuel efficiency and diesel engines’ lower per km emissions. “However, with the onset of recession and the introduction of car scrappage schemes, the share of small cars witnessed a spike in sales, and grew from 37% in 2007 to 45% in 2009.”

Mr Chandna added: “Looking beyond 2010, with a focus on market drivers and inhibitors, diesel car penetration will be boosted by new EU regulations that require car emissions to be brought down*, the lower cost of diesel in most parts of Europe, and diesel vehicles being the preferred choice of fuel for the fleet industry. “On the other hand, the growing popularity of smaller cars in Western Europe, the increasing penetration of alternative vehicles and the fall in the average number of miles being driven* in Europe will favour petrol.”

 

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