AID Study: U.S.Diesel-Powered Vehicle Sales To Surge

FRANKFURT November 4, 2002; Dow Jones using a new AID study as their source reported that the number of cars in the U.S. powered by diesel is expected to surge as new technology breaks down old concerns on diesel engines, a study released Monday shows.

By 2010, environmentally-friendly, fuel-economic diesel engines should reach a market share around 16% - up from a mere 0.2% now, the report by U.K.-based Automotive Industry Data said, according to a news release.

That means 2 million diesel-powered sport utility vehicles and pickup tricks, and 400,000 passenger cars would be on U.S. roads by 2010, the report said. In 2006, there should be 230,000 SUVs and light trucks and just 50,000 cars.

Diesel engines have been increasingly popular in Europe and now account for roughly 40% of passenger car sales.

But in the U.S., diesel is still victim to old prejudices holding that diesel- powered cars are smelly, pollutive, noisy and slow.

"Americans have been immune to the appeal of the high fuel economy promised by diesel," AID managing director Peter Schmidt said in the press release.

Because U.S. drivers pay nearly three times less for fuel than Europeans, they have lacked a motive to switch from gasoline engines, Schmidt said.

In fact, the U.S. could save $9 billion a year in oil consumption costs if U.S. drivers bought diesel-powered vehicles at the same rate as Europeans, AID said, citing auto supplier Robert Bosch Gmbh . This would also "avoid spewing 5 million metric tons of annual greenhouse gas emissions into the atmosphere."

Citing one German car maker making headway in the U.S., AID said Volkswagen AG has sold more autos with diesel engines in the first nine months than in all of 2001. Sales last year were 24,000, up from about 15,000 in 1999, AID said.

Other European auto makers - even premium companies like Bayerische Motoren Werke AG and DaimlerChrysler AG's Mercedes-Benz - have said in the past they would sell diesel-powered cars in the U.S. if they see demand. But for diesel to become mainstream, it would require time and major investments in infrastructure, such as adding diesel fuel pumps in gas stations, industry experts say.

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