Diesel cars are catching on, both in Europe and the United States. The Acklam Car Centre blog analyses why this might be and how this could affect the car market in the future.
More and more diesel cars are being sold across Europe and the US, we have seen it here at Acklam Car Centre, but large price fluctuations could scare off potential buyers of diesel vehicles, despite the fact that a diesel car could save you as much as 20% of your bill at the pumps.
Edmunds.com senior analyst Bill Visnic said: “Car buyers get nervous when they see the price of a fuel jumping around… People don’t like uncertainty.”
The problem is made worse because of the price for a gallon of diesel often rises or falls for reasons completely unrelated to the market price of fuel. This makes diesel look uncertain and unstable. IHS Automotive senior analyst Stephanie Brinley highlighted this characteristic saying “The cost of a gallon of diesel may go up on the same day gasoline goes down”.
This was particularly true in the US when last winter, at times, diesel cost nearly $1 (59p) more than gasoline in some parts of the US, according to the AAA. The average US price for a gallon of diesel in mid-May was 5.4 cents (3p) less than a gallon of premium petrol and about 30 cents (18p) more than a gallon of regular petrol.
Allen Schaeffer, director of the Diesel Technology Forum said “The price of diesel is a mystery to many people,”. The Diesel Technology forum is a group made up of automakers, suppliers and other companies, and they expect diesel powered vehicles to grow from around 3% of the US market to 6% and then up to 9% by 2020.
As many as 40 new diesel vehicles are to go on sale between now and the end of 2016, who knows some of them may end up in the Acklam Car Centre showroom soon!
Oil refineries in America are pressing to produce more diesel because global demand for the fuel is rising. Tom Kloza, chief oil analyst with the website Gasbuddy.com said “Diesel is the product refineries want to make … It’s more steadily profitable than gasoline.”
Kloza says that the price of diesel was exceptionally volatile this winter because fuel is linked to the price oil which is effected by heating demand.
Despite the fluctuations in price, the consensus is that U.S. and European diesel consumption will rise as car manufacturers and consumers reach for more fuel-efficient vehicles, as the price of petrol keeps rising and consumers are looking for more fuel efficiency to save money at the pumps.