Diesel cars outsell Gasoline

The BBC notes that diesel overtakes petrol car sales for first time:

Diesel sales made up 50.6% of the total in July, the Society of Motor Manufacturers and Traders (SMMT) said.

The sale of petrol cars dropped by almost a third in July compared with the same month a year earlier.

The article gives two main reasons in their analysis: company fleet restock and drivers buying more efficient engines. They say the tipping point came with diesel pump prices reaching the same as gasoline.

“They are buying despite the £1000 extra cost of diesel car, relying on the 15-20% greater fuel efficiency to leave them better off in the long run.”

According to the motoring organisation, a petrol car owner is now spending on average £123.85 a month on fuel compared with a diesel driver’s average spend of £103.28.

The popularity of diesel has been helped by a substantial fall in the price differential between petrol and diesel. In 2008 it was 13p per litre, wiping out any substantial cost savings a more fuel-efficient diesel engine might offer.

Last month, the difference at the fuel pumps was only 1.5p per litre.

I do not agree with this analysis. The price at the pump varies regularly and diesel is usually close in price. Diesel can be above or below gasoline with very little explanation or reason. Thus, unless people are buying cars on a moment’s notice, there is something else driving them (no pun intended) towards a diesel engine.

My guess is that the usual criteria like performance and prestige are a bigger factor. Why else would so many purchase cars that require premium fuel, which always costs more than regular? BMW, for example, markets their cars to drivers who are concerned with the time to go 0-60. The new diesel 3-series is as good or even better than the gasoline model. That is more likely a real tipping point, rather than just cost at the pump.

The aesthetics of a modern diesel also may be a factor: quieter, better-smelling, better-looking…all the things that used to be said about gasoline are now the reverse. You want an engine that purrs or has a low growl? Diesel comes that way by default. The high-pitched whine of gasoline is out.

Perhaps most important of all, however, is the efficiency measured in terms of convenience and lifestyle. A man who lives in San Francisco I recently met said that due to his first newborn he finally sold his Chevrolet Tahoe and bought a VW Jetta SportWagon with a diesel engine. His eyes grew wide and his hands gestured excitedly as he explained “I have to find a station and stop for gas half as often now — just once every other week. I get back so much time!” When was the last time you heard the father of a newborn talk about all the time they have found?

A quick calculation on productivity in America could make regulation go something like this: require all new pickup trucks to have engines that get 45mpg without any loss in towing power or capacity; this has been done before using diesel technology and could easily be done again. In some sense, it already has.

The funny thing about general technology/marketing evolution is that this 1980s vision of utility

has recently been turned into this (concept)

and this (reality)

There will be approximately 1.5 million pickups sold this year, which get a (questionable) publicized average of 22mpg. Take the 1.5 million gasoline engines filling up 20 gallon tanks every week and compare it to the same number of diesel engines filling up 15 gallon tanks every other week. Right there you eliminate 1 billion (975 million) gallons of fuel consumption in one year and that is just for new vehicles. Assuming 30 minutes is spent for each pump visit we also would recover 19.5 million hours of time for those new vehicles. With current pump prices ($0.20 difference between regular and diesel in America) that means $2.6 billion saved ($1742/yr per vehicle). If the time saved is mapped to $20/hr of productivity that is $585 million gained a year ($390/yr per vehicle).

US Savings in One Year: If All New Pickups Had Diesel Engines

In other words moving the pickup market to diesel would return approximately $2,000 per vehicle in time and cost per year. These calculations alone, however, will not be enough to move the majority of consumers, as noted above. When you add in performance and more prestige — being seen as macho, hip or cool with a diesel — you cover all the primary issues in the American market. On that note the recent fashion trend towards 80s nerdiness (led by the coming-of-age consumers born during that time) should make it easy to see how diesel could outsell gasoline even in the American market.

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