European motorists: driving towards diesel

march

25th

European motorists: driving towards diesel

The ACEA has announced that over 50% of cars sold in Europe in 2007 had diesel engines.

Diesel cars accounted for over half of new car registrations in 2007. With fuel prices expected to stay high for the foreseeable future, the growing preference for diesel cars is likely to continue. However, while there is a general trend towards diesel cars in Europe, this is not necessarily the case in other markets. Fuel retailers with networks across borders need to take this into account.
According to the European car manufacturers group ACEA, diesel engine cars accounted for 53% of total sales in 2007, representing a total of 15 million cars in the European Union, Iceland, Norway and Switzerland.

There are a number of factors driving this growth. One major incentive has been rising fuel prices at the pump. As diesel engines are about 30% more efficient than their gasoline counterparts, motorists can see their fuel bills significantly reduced. Diesel engine improvements have been another factor in encouraging motorists to trade-in their petrol vehicles.

The importance of this for fuel retailers is that petrol sales are rapidly being replaced by sales of diesel, a factor that must be taken into account when deciding the proportion that diesel pumps should represent. It is also important for fuel retailers to understand how the demand for diesel versus petrol is expected to develop over the coming years and how this will vary between markets.

Indeed, there are significant differences between markets in terms of the extent to which the popularity of diesel is predicted to grow. The largest shifts towards diesel are forecast to take place in Poland, the Czech Republic and Hungary, where diesel cars are expected to account for 60%, 53% and 44%, respectively, of new registrations in 2011. This represents an increase of 17, 16 and 13 percentage points, respectively.

In essence, spurred on by higher fuel prices and improved diesel engines, the growing preference for diesel vehicles is likely to continue. However, while this is an important issue that fuel retailers must take into account, it should be noted that, given the divergences between markets, each strategy needs to be specific to that country.