Consumer demands for better fuel economy, pressure on carmakers to reduce CO2 emissions and the introduction by manufacturers of more advanced diesel engine technology. These are the key factors that are helping to fuel the continued rise in diesel passenger car sales across Europe, according to the latest report by independent technology provider Ricardo Consulting Engineers.

The company, which represents one of the most powerful skills and knowledge bases within the automotive industry, reports diesel market penetration increasing by almost another 4 percentage points last year, with record sales for the first time exceeding 5 million vehicles. In 2000, diesel car sales across Europe reached 4.76 million vehicles, a market penetration of around 32 per cent. In 2001, sales increased by a further 12.1 per cent, passing the five million threshold, to reach 5.33 million, with market penetration rising to almost 36 per cent. At this rate, Ricardo estimates that diesel car sales will reach a market penetration in excess of 40 per cent in 2002 and 50 per cent, potentially, by 2005.

In terms of major markets, France and Germany continue to enjoy rapid growth, with Italy experiencing more modest increases. Sales of diesel cars in France, Spain, Austria, Belgium and Luxembourg already exceed those for gasoline cars. The UK, which for six years has experienced a steady decline, witnessed a significant turnaround last year with a sharp rise in diesel sales of 39 per cent.

Ricardo, which has pioneered much of the development work in advanced gasoline and diesel engines and monitors market trends on behalf of its many clients worldwide, says that improvements in diesel engine performance, driving characteristics and refinement are helping to drive the rapid growth of diesel engine sales across Europe.

"In order to meet consumer demands for better fuel economy and to meet EU CO2 emission targets of 140g/km by 2008, carmakers are directing a lot of effort towards diesel engine technology," comments Ian Penny, director of diesel engineering at Ricardo.

"We have now reached a stage where the technological development of the diesel engine has caught up with gasoline. A new generation of high-pressure fuel injection systems, variable geometry turbochargers coupled with improvements in cooling techniques have all helped to eradicate traditional disadvantages associated with diesel engines. In addition to the lower fuel consumption cost incentive, I am not surprised that many potential car buyers today actually prefer the performance and refinement of modern diesel engines."

"Manufacturers are also making the diesel option more attractive by increasing the number of diesel models in their ranges. In view of all this, we expect diesel to match gasoline car sales throughout Europe by 2005 or 2006."

Diesel share of 36% of European car sales sets a new record

Overall, diesel market penetration last year increased to 35.9 per cent from a previous high of 32.3 per cent in 2000. Diesel car sales in 2001 rose an impressive 12.1 per cent reaching 5.33 million vehicles.

Sales of car-derived vans and light commercial vehicles are already heavily biased towards diesel and in 2000 reached a new record level of 1.56 million units representing a volume rise of 3 per cent.

France has the largest share of the West European diesel market, achieving almost 24 per cent of total diesel car sales in 2001. It experienced a huge surge with sales increasing by 21 per cent, reaching 1.27 million units and representing more than 56 per cent domestic market penetration.

Although losing ground to France, Germany remained the second largest market for diesel cars in 2001. Sales increased by 12.6 per cent with market penetration rising to almost 35 per cent. As with France, diesel sales in Germany exceeded one million units. Germany still remains Europe's largest exporter and producer of diesel cars.

Since punitive anti-diesel tax measures were removed in 1995, diesel passenger car sales in Italy have been rising rapidly. 2001 was no exception with sales increasing by 9.2 per cent and market penetration rising to almost 37 per cent.

After nine years of dramatic growth in diesel sales, Spain showed a temporary decrease in sales in the early part of 2001, but an overall increase of 1.1 per cent by the end of the year. Market penetration, which reached a high of 53.3 per cent in 2000, still accounted for more than half (51.8 per cent) of all car sales in 2001. The temporary decrease in diesel sales was due to the introduction by the Spanish government of a scrap incentive scheme, which provides purchase tax deduction on a new gasoline powered car when scrapping an old gasoline powered car.

In the UK, business car drivers trying to reduce CO2 levels in the run-up to the new emissions-based company car tax, starting in April 2002, helped fuel last year's rapid rise of diesel sales. Sales increased substantially by 39 per cent with market penetration also rising, to around 18 per cent. Another contributing factor was the prior change to road tax for business and private motorists for vehicles registered after 1st March 2001. This tax is also graded by CO2 emissions and therefore tends to be cheaper for diesel vehicles. Despite the fact that the UK remains the only major market where diesel is more expensive than gasoline, government regulations and consumer demands for better fuel economy suggest that there is potential for diesel sales to continue increasing. Diesel penetration of the UK car market has previously been higher, peaking at 22.6 per cent in 1994.

The Benelux countries of Belgium, the Netherlands and Luxembourg recorded a slight increase in total diesel car sales in 2001. A fall in demand in the Netherlands was offset by a sales increase of 6.3 per cent in Belgium and Luxembourg; two countries that combined have the second highest diesel penetration of all the major markets at 62.3 per cent.

Austria once again enjoyed the largest diesel penetration with 65.7 per cent in 2001, a new record for the major European markets. Diesel sales in Austria are largely helped by the country's vehicle purchase tax, which is linked to fuel economy, therefore giving diesel passenger cars a priceadvantage.

Advanced technology fuels continued rise in diesel sales

Throughout Europe, vehicle manufacturers have significantly increased the development effort directed towards diesel technology, which has led to rapid advances in refinement and performance of today's modern diesel
engines.

Common rail fuel injection systems, first introduced in 1997, are now used on the majority of new diesel engine designs. Thanks to better understanding of cooling strategies, improved fuel injection and more advanced turbocharger technology, production diesel engines are now available with power outputs up to 180kW (240bhp). It is expected that within five years manufacturers will be able to offer customers the same number of diesel options as gasoline variants for each vehicle, further
enhancing the desirability of the diesel car.

A major future technology, which will help carmakers meet the 140g/km CO2 target, is the development of mild hybrid diesel engines. Ricardo is currently undertaking, in collaboration with Valeo, a major research project known as i-MoGen (Intelligent Motor Generator) aimed at producing a mild hybrid diesel next-generation prototype, which can demonstrate less than
4-litres per 100km fuel consumption. The i-MoGen C-class demonstrator's electrical machine accounts for no more than 10 per cent of the engine'spower output (hence mild hybrid) and uses a 1.2-litre high output diesel engine producing 62kW (83bhp) per litre. The combination of the downsized diesel engine together with the low speed torque boost of its electrical
machine will help i-MoGen achieve a performance feel similar to existing 2-litre turbo diesel cars, but with the benefit of even lower fuel consumption and CO2 emissions.

Ricardo's 2002 report "Diesel Passenger Car and Light Commercial Vehicle Markets in Western Europe" reviews sales and production data, analysing trends by vehicle type and by manufacturer and for individual major markets as well as for Western Europe as a whole. It forecasts both future market and technical trends. The electronic report, which costs 400, can be
obtained from the Ricardo technical library at InfoServices@ricardo.com or
call +44 (0) 1273 794230.