Will Diesel Fueled Cars Gain Popularity in North America?

While Audi's newest television marketing campaign declares that "Diesel is no longer a dirty word" and that by increasing diesel consumption we can reduce global dependence on foreign oil, The Wall Street Journal reported late last week that "Its [diesel] prices are mostly tied to the fate of the global economy” in a piece titled “Rising Diesel Costs Crimp Truckers, Manufacturers". Noting that "Retail diesel prices have climbed more than 14% over the past month to a national average of $2.61 a gallon, according to the auto club AAA," The Journal suggests that these prices still trail gasoline costs, "which jumped 16% in the same period to an average $2.68 for a gallon of regular unleaded". And as of yesterday the The Journal reported that "Oil Falls Below $67 a Barrel as Demand Concerns Take Hold" but that downward pressure on futures -- if sustained -- "will not be seen at the pump until after the Fourth of July weekend" and that "U.S. gasoline demand accounts for more than a 10th of global oil consumption".

As a long-time proponent of Diesel cars -- owning a number of "clunkers" dating back to the 70s that President Obama would have me trade in -- I can vouch not only for diesel's efficiency, but also the longevity that properly maintained diesel engines can provide. But I suspect the cultural gap between North American and European mindsets when it comes to diesel is still too high to bridge to make them more commonplace on US streets. I also suspect that if diesel even crossed the chasm in US auto sales, that rising demand would also lead to increased prices (last summer the price of diesel was significantly higher than gasoline in many parts of the country).

After all, "In many parts of the world, diesel is used to fuel manufacturing plants and the trucks that transport their products," the WSJ article suggests. Even if diesel does not gain widespread adoption in North America thanks to legacy perceptions, I suspect global demand will drive continued price pressure to the point where the economics of diesel cars (given the usual upfront premium cost compared to gasoline models) combined with high prices still make them more of a curiosity item in the US than anything else -- albeit one that no longer idles with the familiar chug given advances in technology. Which is fine by me because I still relish the fact that my ‘79 300D (with over 400,000 miles) still bests many new Mercedes in realized mileage.

William Busch

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