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Survey: US New-Car Shoppers Do Not See Diesels as a Likely Mainstream Powertrain

28 January 2008

According to the latest Kelley Blue Book Marketing Research study, only six percent of new-car shoppers in the US think that diesel is most likely to succeed in becoming a mainstream vehicle powertrain type, compared to 40% identifying hybrids, 20% selecting hydrogen fuel cell vehicles and 17% citing flexible-fuel systems.

When asked about their perceptions of diesel engines, nearly half of the in-market new-vehicle shoppers say that diesels are dirty and noisy. In addition, the latest study shows that shoppers increasingly believe that diesel-powered vehicles get poorer fuel mileage than conventional gasoline engines, and fewer consumers are seeing diesels as fuel-efficient.

Interest in diesels is steadily declining among in-market new-vehicle shoppers, while interest in hybrids continues to grow. The gap between shoppers’ interest in diesels versus hybrids has greatly widened particularly in the last month, with the nine-point gap in December 2007 jumping to a 17-point gap in January 2008.

Many automakers are looking toward diesels as a very workable solution for the future, especially in light of the recently passed energy bill, but the results of this study should give them pause and make them realize they need to do a better, more thorough job of winning over the American consumer. Clearly many Americans still think of the dirty diesels of the past and are not aware of the benefits of new clean-diesel technology.

—Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book

While diesel consideration and favorability are declining in the eyes of in-market new-vehicle shoppers, hybrids continue to gain favor. In addition to hybrids being seen as the most viable mainstream powertrain choice, interest in hybrids has steadily increased in recent months, with 61% of shoppers saying they are interested in hybrids in the latest study.

When asked about the premium they are willing to pay for a gas/electric hybrid over a traditional gasoline-powered version of the same vehicle, this month shoppers are willing to pay an average premium of $3,135, up from an average premium of $2,645 a month ago in December 2007.

When asked about which hybrid vehicles they would consider for their next purchase or lease in the latest study, in-market new-vehicle shoppers cite the Honda Civic as most popular with 35%. The next most-popular models are the Ford Escape and Toyota Highlander, each garnering 23%. Toward the bottom of the consideration list is the vehicle that arguably put hybrids on the mainstream map—the Toyota Prius—which only garnered 12% of the consideration.

Prius sales accounted for more than 52% of hybrids sold in the US in 2007.

The latest Kelley Blue Book Marketing Research study was conducted on Kelley Blue Book’s kbb.com among in-market new-vehicle shoppers during January 2008. Kbb.com is rated the No. 1 automotive information site by Nielsen//NetRatings and is ranked as the most visited auto site by J.D. Power and Associates eight years in a row. Nearly one in every three American car buyers performs their research on kbb.com.

January 28, 2008 in Diesel, Market Background | Permalink | Comments (115) | TrackBack (1)

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Comments

We Americans are really ignorant when it comes to diesel. The diesel cars of the 80's get blamed but I believe most people never knew about the 80's diesels or remember them. The only diesels on the roads here the last 20 years are big pick ups. Until recently they were loud, stunk and smoked a little.

Yes I know Volkswagon has diesels but it's small number of cars in the big picture.

Count me in with the 94% who think the diesel is "unlikely to become a mainstream powertrain type". My opinion is based on extensive research that shows the emissions laws will not allow them to be sold here. Why should automakers try to win over customers?

JRod.

LOL A population where 20% think that a hydrogen fuel cell vehicles is in their future is a population that has it's head throughly up its tailpipe.

What about availability of diesel? if crude production is leveling and in decline then increasing use of diesel will send prices to the stratosphere. There is less diesel coming from a barrel of crude than there is gas.

does not sound a like a reliable survey

A survey that places the Prius in 5th place is questionable.

Diesel is just another variant of ICE machines and should be replaced as soon as better ESSUs become available.

For future PHEV-60+, it wouldn't matter that much if the small ICE motor driving the generator a small 2-cyls, a rotary, or a diesel or even a fuel cell because it wouldn't be used that much or less than 15% of the time.

Just goes to show how little consumers know!

I question the validity of this survey as well, in particular when it comes to the hybrid preferences. But the sentiment on diesel may be right. Too many times, since the early 80's, manufacturers and car experts/magazines have extolled the virtues of diesel, largely in vain. In this country (US) diesel does not make sense as the price of the fuel is usually at a considerable premium over normal gasoline, so any savings from greater economy are offset by higher prices at the pump.

A majority of Americans also believe/believed that Saddam Hussein was responsible for 9-11. Many, including a presidential candidate, don't believe in evolution.

They surveyed mainstream consumers, so it comes as no surprise they are mainly interested in mainstream cars. The Prius isn't that for different reasons. The Prius has more appeal with the the early adopters that want to be seen as such by everybody.

I wouldn't put any stock into any automotive surveys. Time and time again people will say one thing, but when it comes to putting money on the table, they end up buying something else.

I think the automakers already know the answer about the diesel market trends. There is no profit in offering diesel as a fuel-saver for passenger cars. VW may want to keep that diesel niche, but all other companies are only offering diesels for trucks and as a gimmick for luxury brands.

The survey may be tainted by Americans view of diesels in passenger cars as smoky, smelly, noisy, underpowered and slow. They may remember the diesel VW Rabbit cars from the early 80s.

If you can show them a modern diesel that is quiet, clean, powerful, efficient, and affordable, their opinions might change. I do not think Americans care what engine or fuel is used. As long as the fuel is available and affordable and the car does the job, they might listen.

I think this kind of survey is meaningless. Put diesels in showrooms that give consumers significantly better fuel efficiency at very little (or no) additional up-front cost, and these attitudes will turn around in record time.

Kneejerk comment:

Unfortunately, the headline is probably accurate. We, Americans, are oblivious to all the diesel freight bringing to us all that we consume.


See that. It's me, laughing at all the uniformed sitting in line at the gas station. 733 miles on my last tank. Idiots!

Sorry for the rudeness, but I have been telling anyone who will listen about TDI's for a decade.

By the way, Dino is less than midgrade here and I buy Bio for $2.25 a gallon.

@Lou:

Where does this your information come from that a diesel has no price premium? To my knowledge diesels are always more expensive.

Take for instance the Volkswagen Jetta. The base version with a 1.6l gasoline version is sold for € 20.050. That same version with the diesel is € 22.175 and € 22.750 if you want a particulate filter. That's more than € 2000!

I agree , here in Italy , the petrol car seems to be becoming a rarity
with diesel outselling 3 to 1 , and we are paying for it , go down into
the town centre at 8 on a cold morning and the air is foul , all the
kids waiting for the school bus are getting a liberal dose of nano-particles
deep down in their still- forming lungs , God only knows what their
health is going to be like into their adulthood .
My local mechanic told me the other day that he had been warned
whilst on an in- house BOSCH training course , that under no circumstances
where they to carry out repairs on modern common-rail diesels in
an enclosed space without extraction equipment , the reason given was
that the particles from this type of car had been linked to the formation
of lung tumours .
I think this proves that the industry is aware of the problems
associated with diesel emissions , so way are they so eager to push this
technology out in the States , it could end up as expensive in the long
haul as the tobacco problem !

Joseph

I don't know where you live that diesel is cheaper than midgrade, but that must be a quite exceptional place. Here is the website that shows the difference in pricing.

http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp

And, I agree with Anne, diesel engines are more expensive to make and typically carry a premium of 3000-4000 dollars compared with the gasoline model. You would have to drive an awful lot of miles before you make any savings, if any, with diesel in the US.

I think the best use of market research is to adjust and improve existing products in consumers' hands. But when you use it on a nonspecific, theoretical diesel car which you can't buy and no one's neighbor owns, you just mirror the general fact that the broad mass of consumers will always resist new things. No one wants to take a risk being the nerd with the weird-o-mobile in the corner.

Executives have a duty to themselves not to defer their leadership and hide cowardice and inaction behind this kind of data. It must be expected. Consumer tastes aren't carved in stone, they change with time. For any serious innovation, it takes the handful of daring consumers with cash, the early adopters, to lead the way for everyone else. If the concept, implementation and marketing are right, people will follow along because your car is better than the alternatives. In this case, the high oil prices are an opportunity to drive it along nicely, and that reduces the risk.

I find this rather discouraging. I understand there are legacy perceptions of diesels being "dirty", slow, noisy, etc., but I have to wonder where the "...diesel-powered vehicles get poorer fuel mileage than conventional gasoline engines, and fewer consumers are seeing diesels as fuel-efficient" came from.

Regarding the comment about less diesel coming from a barrel of crude than gasoline, it is my understanding that there is considerable flexibility here. There was a post here on GCC a while ago about Marathon increasing diesel production relative to gasoline (http://www.greencarcongress.com/2007/04/marathon_increa.html#more) as well as another refiner (http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-diesel_06bus.ART0.State.Edition1.2af09c3.html).
I also recall that Rafael Seidl mentioned in one of his posts that a significant amount of middle distillate is converted ("cracked") into gasoline (in the U.S.). Rafael, care to elaborate?

As someone who owns and drives diesels daily, I can honestly say that I would love to have more diesel options going forward. If we lived in or near the city, we would consider the Prius but, driving mostly highway miles, the advantage clearly goes to the diesel IMO. Not only do we get 20-30% better fuel mileage but, the retained resale value for the diesel is quite substantial, about 5k more than a comparable gasser on our VW, several times more than the initial diesel premium at purchase.

I agree that the best solution would be to drastically cut ICE use but, the question is how. Most people are not going to be willing to make the changes necessary until the need becomes much more obvious. In the meantime, baby steps will have to do.


Yes, the TDI's can be more expensive. However, other than the better engine, regular Jetta's come standard with 'Package 0' interior, the TDI comes with 'Package 1' standard, big difference. My 05 TDI was 20,500.

No, the prices I quoted are for exactly the same car, only different engines. For other brands I have observed the same difference between diesel and gasoline.

Again, it doesn't matter what people say about diesels or hybrids, when it comes to the time that they are ready to buy, people always end up buying what they want and saving fuel is often low in priority (strike against diesel).

I have two diesel-heads who are always singing songs about how they love their cars (dirty pre-t2bin5 diesels), and ended up trading in both diesels for petro SUVs last year.

In this blog, we all push for some kind of alt-fuel vehicle, but in the end, just about most of the vehicles sold will still be petro SUVs in US.

An afterthought: we must of course consider where the prices of a car are determined, and this is not in the manufacturing department. It's the marketing department that sets the prices.

The same applies to the hybrid/non-hybrid discussion. Most people tend to think that the fact that hybrids cost x $$$/€€€ more than non-hybrids is caused by the differences in manufacturing costs. This is dangerous to conclude. Hybrids are trendy/hyped, and can be sold at a higher margin. The actual difference in cost is not reflected in the price.

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