Pike Research forecasts clean diesels to represent more than 12% of global light-duty vehicle sales by 2018


A new report from Pike Research finds that rising fuel prices and stronger fuel economy regulations will stimulate increasing demand for clean diesel vehicles in markets around the world, and forecasts sales of these vehicles will increase from 9.1 million in 2012 to 12.1 million annually by 2018, representing 12.4% of all LDV sales by the end of that period.

With rising gas prices and stronger fuel economy regulations coming into effect, the United States should see rising demand for diesel cars and trucks, Pike suggests. North America has been a weak market for diesel for 20 years, due to the low price of gasoline as well as diesel’s reputation for being smelly, dirty and unreliable. Additionally, US LDV emissions regulations do not treat gasoline and diesel cars separately, and US NOx levels for LDVs are very low and challenging for diesel vehicles to meet.

However, Pike notes, in 2011, the diesel market began to show signs of revival, with 27% growth over 2010. The overall LDV market in the United States grew by just 10% and hybrid vehicle sales actually dipped slightly.

From 2012 to 2018, Pike forecasts that North America will experience a cumulative diesel growth rate of 22%, reaching annual sales of just under 1 million LDVs, with the US leading Canada. Pike expects annual clean diesel sales volumes in this region to increase from 282,000 vehicles in 2012 to 928,000 by 2018. Between 2012 and 2018, diesels will capture a slightly higher percentage of new vehicle sales as hybrids, although both will remain niche drivetrains, according to Pike.

Demand for diesel cars is primarily driven by their fuel economy. A diesel vehicle typically gets 20% to 40% better fuel economy than a comparable gasoline car. This factor, along with favorable tax treatment for diesel fuel, has made diesel cars tremendously popular in Europe, where they have accounted for around 50% of LDV sales over the past several years. Due to Europe’s very high fuel prices, the price premium of a diesel car can be paid off quickly. —Pike senior analyst Lisa Jerram

Globally, Pike expects clean diesel LDV sales to grow from 9.1 to 12 million, representing a CAGR of 4.8%. Western Europe will continue to constitute the majority of clean diesel sales even with slower growth over this period, as diesel captures slightly less market share than it has over the past decade. This slowdown will be due to increasing availability of fuel efficient alternatives to diesel and the anticipated increase in diesel prices, Pike suggests. Nevertheless, Western Europe will remain, by far, the biggest market for clean diesel LDVs, accounting for around 50% of global sales.

For medium- and heavy-duty vehicles, Pike anticipates that in the North America, Europe, and Japan markets, diesel will see its market share erode slightly, as hybrid, plug-in, and natural gas (NG) vehicles begin to see more demand. This will be driven largely by new fuel economy regulations governing MD vehicles in these regions.

In North America and Europe, Pike forecasts that clean diesel will drop from close to 99% market share to 93% in North America and 91% in Western Europe.

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