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Prospects for the Diesel in the United States

The potential for the diesel in the United States revolves around three issues–consumer acceptance, fuel prices, and ability to meet future emission standards. Consumer acceptance of the diesel should improve significantly with the new generation of engines.

OTA had the opportunity to evaluate the VW DI diesel and the Mercedes four-valve diesel, and these new engines minimize performance differences relative to their gasoline engine counterparts in terms of power, acceleration, noise, and vibration. In fact, diesel sales in Europe have increased significantly with the new engines despite unchanged fuel prices from 1993.

The major factors behind the lack of consumer interest in the United States are supposedly the low fuel prices and the higher price of diesel relative to gasoline. Undoubtedly, these factors do not help diesel market penetration, but they are not the sole factors controlling diesel market penetration.

Diesel Prospect

Figure 3-3 provides the diesel market penetration in Germany during a 15-year period, and also provides VW’s explanations for the observed changes over the years. 62 as can be seen, W believes that vehicle tax policies, perceived emission benefits, and fuel prices have all contributed to the large oscillations in diesel sales.

If W is correct, it may be possible to implement vehicle tax policies to favor the diesel, if the United States decides that fuel conservation is a high priority. Further, to the extent that consumer perceptions of poor performance and unreliability have influenced U.S. diesel sales, experience with the new generation of diesels conceivably might bolster a diesel comeback.

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