Americans can be forgiven for not embracing diesels as ardently as Europeans thanks to high costs and a lack of options. But a new study by IHS Markit shows that diesel loyalty is trending up in the U.S. and falling sharply in Germany.
In June 2017, 29.8 percent of U.S. diesel drivers who gave up their cars traded in for another diesel. That’s above the 20.7 percent recorded in December 2016, although not as high as the 37.4 percent we saw in June 2015. This is surprising given the recent bad rap diesels have gotten thanks to Volkswagen’s wide-reaching emissions cheating scandal, in addition to accusations that other automakers have also been cheating.
Diesel loyalty remains stronger in Germany, but it’s on the decline. In July 2015, 69.5 percent of diesel owners who gave up their cars opted for another diesel, but a year later, that number dropped to 63.4 percent. And by July 2017, only 47.7 percent of diesel drivers stuck with diesel.
When excluding the relevant fleet market and looking only at private vehicle owners in Germany, the decline is even sharper. Loyalty stood at 67.3 percent in July 2015, 61 percent in July 2016, and 44.2 percent in July 2017.
In all age groups, women were more likely to defect from diesel in Germany. Overall, drivers 55 years and older turned away from diesel the most from July 2016 to July 2017. Loyalty dropped 20.8 percent among women and 19.3 percent among men in this age group. Numbers fell among men and women ages 35-54 and 17-34, but not quite as sharply.
Declining loyalty is just the tip of the iceberg. Diesels will suffer an 18 percent decrease in passenger car market share in Europe over the next 10 years, IHS Markit predicts.
“Diesel has a cemented future in this time frame due to its role in helping to reduce C02 emissions, but that role is being diminished,” said Mike Yakima, lead of international customer loyalty products for IHS Markit. “Going past the 10 year horizon, diesel will see continued drops in share as electrification strengthens.”
It has been a rough few years for diesel. After Volkswagen confessed to using cheat devices, the company shifted focus away from diesels toward EVs. Meanwhile, the traditional internal combustion engine is also facing challenges. Volvo says it will stop selling pure gas and diesel cars starting from 2019, while Aston Martin, Honda, and Jaguar have also made bold plans for electrification.
Right now, relatively few diesel owners in Germany are switching to vehicles with alternative powertrains. Women aged 17-34 were least likely to trade in a diesel for a vehicle with an alternative powertrain (2.74 percent), but men aged 35-54 were the most likely at 7.75 percent.
Yakima says that talk of diesel-free cities and real world emissions targets are likely affecting loyalty rates, although it’s hard to quantify these concerns in the data.
If diesel owners in Germany are turning away from the technology, does it have any shot of lasting here in the U.S.? A number of automakers seem to think so. Mazda is introducing a diesel version of the CX-5 it hopes will make up at least 10 percent of sales for the crossover on our shores. Jaguar introduced new diesel powertrains for the XE and F-Pace, and GMC is offering the tech on the new Terrain. However, IHS says that, while it sees a slight increase in diesels penetrating the U.S. market over the coming years, it doesn’t expect diesel to make up more than 5 percent of the market. And after 2020, it predicts diesels will gradually decline in popularity.
Source: IHS Markit
The post Diesel Loyalty Falls Sharply in Germany appeared first on Motor Trend.
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