J.D. Power-LMC Reports: Annual Global Diesel Light-Vehicle Sales to Reach 27 Million by 2015

North American Diesel Sales Expected to Strengthen

WESTLAKE VILLAGE, Calif., Sept. 29 -- Diesel-powered cars and light trucks are expected to comprise 28 percent of global light-vehicle sales by 2015, according to a J.D. Power-LMC forecast released today.

J.D. Power-LMC predicts global diesel light-vehicle sales to increase from 12.5 million in 2003 to 27 million by 2015, with 60 percent of the growth coming from outside of Europe. While diesel sales in Europe, Asia and South America are expected to continue to grow at a steady pace, a significant increase of diesel sales is anticipated in North America.

"We expect diesel cars and trucks to comprise as much as 16 percent of new light-vehicle sales in North America within the next 12 years," said Alastair Bedwell, research manager for LMC Automotive Services.

Diesels made up 4.5 percent of car and light truck sales in North America is 2002.

Strong demands for diesel cars in India and South Korea are drivers behind expected growth in Asia. The Japanese and Chinese car markets should see moderate increases in diesel-powered vehicles, though they will be among the last markets to experience diesel penetration.

"The fiscal environment and local regulations are the two key factors that influence consumer decisions when it comes to diesel-powered vehicles," Bedwell said. "Diesels took off first in countries where fuel taxation is high and where taxes on diesel are lower than on gasoline. Later, it penetrated countries such as the UK were fuel taxes are less discriminatory, but still high. The final challenge is countries is in where fuel taxation is neither high nor discriminatory."

Bedwell notes that fuel efficiency remains significantly better in diesel engines. Earlier expectations that direct-injection gasoline engines would erode this advantage have not materialized, and such hopes have been largely abandoned as further gains in diesel fuel-efficiency have been made. At the same time, diesels retain significant advantages in torque, and their earlier deficiencies in terms of emissions, maximum power and noise are close to being eliminated, though at a cost.

"The outcome will depend on how consumers weigh the extra purchase price against the fuel savings, and the differences, both positive and negative in the driving and ownership experience," Bedwell said. "In the Western European countries that provide tax breaks on diesel fuel consumers can average annual fuel efficiency cost savings of up to $700. There is certainly some potential for savings, from $100 to $400 annually, in Asia, Eastern Europe and the Americas. The larger, heavier, and less aerodynamic the vehicle, and the greater the annual distance traveled, the greater the financial incentive to switch to diesel."

The global diesel sales forecast is derived from the J.D. Power-LMC 2003 Global Markets for Diesel Powered Light Vehicles to 2015 Study(SM). For more information on J.D. Power-LMC, please visit its web page at www.jdpower-lmc.com .