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Fuel price, choices and old myths limit rise in diesel car sales

April 16, 2013|By Ronald D. White
  • Volkswagen has seen diesel sales increase, a sign that more buyers would be interested if automakers offered more choices. Above, the VW Golf at last month's New York International Automobile Show.
Volkswagen has seen diesel sales increase, a sign that more buyers would… (Stan Honda / AFP / Getty )

A Market Intelligence report from Kelley Blue Book said that more than 80% of new car shoppers are not considering diesel-powered cars. In almost half of those cases, diesel fuel's higher price was the reason.

But about 45% appeared to be laboring under old -- and inaccurate -- beliefs, including the notions that diesel engines are too loud and bad for the environment.

Diesel sales were up nearly 10% in the first quarter, to 88,582 vehicles from 80,185, according to Autodata Corp.

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In March, Volkswagen, the biggest seller of diesel cars in the U.S., reported a 7% gain in diesel sales, accounting for 22.6% of the automaker's U.S. sales.

Those numbers could be higher, Kelley Blue Book said, if automakers increased their diesel offerings and worked at marketing them better.

"Current brands that offer diesel models should focus messaging that debunks the myths that modern diesel vehicles are loud and polluting," the report said.

One message that might resonate: In every state in the U.S. except California, gasoline now has a higher sulfur content than ULSD or ultra low sulfur diesel, said Tom Kloza, chief oil analyst for the Oil Price Information Service.

The price change began in 2006, Kloza said, with the advent of ultra-low sulfur diesel, Kloza said, which is much more expensive to make.

Today the average U.S. price of a gallon of diesel costs $3.942. For gasoline, the average is $3.542 a gallon.

But one thing motorists don't realize when considering the price of diesel, Kloza added, is that diesel fuel delivers better mileage, which mitigates the difference in cost per gallon.

“A significant penetration of the U.S. market for diesel vehicles will take time due to misconceptions," said Alec Gutierrez, senior market analyst at Kelley Blue Book.

But if automakers broaden their diesel offerings and hone their message about how diesel fuel has changed, "the appetite for diesel vehicles will continue to rise," Gutierrez said.

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