Diesels Set to Out-Strip Hybrids in Accelerating U.S. Growth

-- U.S. regulators look set to raise fuel economy standards

-- Demand for both hybrid and diesel passenger vehicles set to climb

-- Diesel offers similar fuel economy to hybrid at lower cost - particularly for larger cars / sport utility vehicles favored in the United States

-- "Clean diesel" can meet future U.S. emissions standards

-- Ricardo / UBS forecasts annual diesel sales of $1.5 million in the U.S. market by 2012

VAN BUREN TWP., Mich., May 24 -- With U.S. regulators looking to revise fuel economy standards amid concerns for energy security and greenhouse gas (GHG) emissions, research published today by UBS and Ricardo points to combined annual diesel and hybrid gasoline vehicle sales in the United States of $2.7 million by 2012. The Ricardo / UBS research report "Is Diesel set to boom in the US?" sets out the legislative and consumer drivers of engine technology for the North American automotive market over the coming decade, as well as the many candidate technologies available for future vehicle products.

At present, hybrid gasoline technology appears to be the preferred route in the United States, not least due to its attraction as a visible badge of green awareness amongst higher income purchasers. Many original equipment manufacturers plan to launch hybrid products in the next few years, but the report highlights that this technology faces substantial manufacturing cost penalties, which are unlikely to be eroded even in mass production. Diesel has a clear cost advantage over hybrid, even when fitted with the type of complex exhaust after-treatment technologies necessary to meet future, more stringent emissions regulations.

Diesel already dominates in Europe. The conditions may now be right for a big acceleration in diesel sales in the North American market. Ricardo forecasts that combined diesel and hybrid gasoline will represent 15 percent of the U.S. light vehicle market by 2012, with sales of diesels outstripping gasoline hybrids by 1.5 million units versus 1.2 million. UBS highlights that European automakers and a number of global suppliers look set to benefit from the diesel trend.

Ricardo plc: With technical centers in the UK, USA, Germany and the Czech Republic, and offices in Shanghai and Tokyo, Ricardo is a leading independent technology provider and strategic consultant to the world's automotive industries. The company's engineering expertise ranges from vehicle systems integration, controls, electronics and software development, to the latest driveline and transmission systems and gasoline, diesel, hybrid and fuel cell powertrain technologies. Its customers include the world's major vehicle, engine and transmission manufacturers, tier 1 suppliers and leading motorsport teams. Ricardo is committed to excellence and industry leadership in people, technology and knowledge; approximately 70 percent of its employees are highly qualified multi-disciplined professional engineers and technicians. A public company, Ricardo plc posted sales of 173 million pounds in financial year 2006 and is a constituent of the FTSE techMark 100 index - a group of innovative technology companies listed on the London Stock Exchange.

UBS is one of the world's leading financial firms, serving a discerning international client base. Its business, global in scale, is focused on growth. As an integrated firm, UBS creates added value for clients by drawing on the combined resources and expertise of all its businesses. UBS is the leading global wealth manager, a top tier investment banking and securities firm, and one of the largest global asset managers. In Switzerland, UBS is the market leader in retail and commercial banking. UBS is present in all major financial centers worldwide. It has offices in 50 countries, with about 39% of its employees working in the Americas, 34% in Switzerland, 17% in the rest of Europe and 10% in Asia Pacific. UBS's financial businesses employ roughly 80,000 people around the world. Its shares are listed on the SWX Swiss Stock Exchange, the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE).