(April 5, 2010) General Motors Vice Chairman Bob Lutz told participants at the recent J.D. Power and Associates International Automotive Roundtable in Orlando, Fla., that diesels likely will have a small and not a major place in the U.S. market, and pointed out that automakers selling diesels here currently are operating on waivers, especially since the Tier II Bin 5 environmental requirements are so strict.

During last week’s New York International Auto show press previews, other than the German automakers, Mazda made news announcing that, beginning in 2012, it will sell a clean diesel version of the Mazda6 midsize sedan in the U.S. that will average 43 mpg. Kia Motors America also announced that they would sell the new Kia Sportage compact  crossover (CUV) with a 4-cylinder turbodiesel engine late in the 2011 model year.
 
For a perspective on how diesels will fare in the U.S. market, Mike Omotoso, senior manager of Powertrain at J.D. Power and Associates, was asked for an update:
 
PG: What is your view on the market for diesels in the U.S.?
 
Omotoso: “Diesels are a tough sell in the U.S. because of the tough emission standards and the lingering negative perception of diesel among many American car buyers. Heavy-duty pickup trucks and Volkswagen compact cars account for over 90 percent of the current diesel market.”
 
PG: What is the size of the market in the U.S.?
 
Omotoso: “Diesels accounted for about 2.6 percent of sales in 2009, and we expect sales to reach 8 percent in 2015. Most of the growth will be in the light-duty pickup and SUV/CUV segments. The luxury German automakers — Audi, BMW and Mercedes-Benz — have been successful in selling diesel trucks such as the Audi Q7, BMW X5 and Mercedes-Benz ML 320 Bluetec.
 
PG: What is your vision of diesels going forward?
 
Omotoso: “As gas prices rise, we expect more consumers to see diesel light vehicles with 25 percent better fuel economy to be a viable alternative. The diesel price premium is $1,000-$4,000 per vehicle, depending on the model and brand, and the federal tax break is $900-$1,800 per vehicle. In comparison, the price premium for hybrids compared to gasoline-powered vehicles is closer to $5,000.”
 
J.D. Power Forecast: Diesel deliveries in the U.S. market will almost match hybrid sales in 2010, according to a forecast from J.D. Power Automotive Forecasting. In 2009, diesel sales volume in the U.S. light-vehicle market was 263,000 units, lower than hybrid sales of 290,000 units. In 2010, projections are for diesel sales to improve by about 28 percent and reach 332,000 unit sales. Hybrid sales also are expected to rise by 17 percent and reach 338,000 units.