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Fewer German buyers are choosing a diesel

Debate over particle filters and taxation unsettles consumers

Munich. Uncertainty about taxes and the lagging availability of particle filters have led to a sharp decline in diesel's share of new German registrations since January.

According to the federal vehicle transportation office, diesel's share fell steadily from 48.2 percent in January to 39 percent in July.

Over the past four years, diesel's sales declined in January and February but then bounced back. Diesel's share reached a record of 48.3 percent in 2004.

The decline this year has hit carmakers to varying degrees. The share of diesels in Germany for Audi and Mercedes fell just a little more than 5 percentage points.

Six other manufacturers were down sharply through the first six months of this year: Nissan fell 16 percentage points, Volkswagen nearly 16 points, Renault and Ford each 14 points, Citroen 13 points and BMW 10 points.

The discussion about particle filters that broke out in spring mainly "led to a wait-and-see attitude among buyers," said Ulrich Winzen, market analyst with Polk Marketing Systems.

Particulate filters a "disruptive factor"

Manufacturers see the trend similarly. CitroŽn spokesman Thomas Albrecht refers to the filter debate as a clearly "disruptive factor," and Peugeot has made reference to unsettled car buyers.

Likewise, the idea of creating tags to regulate access to city centers hasn't benefited diesels. And

the lagging supply of particle filters is hurting them, Winzen said.

Many manufacturers have announced that filters will be available on most models this autumn at the latest, and Mercedes plans to make them standard.

But there is now a waiting period for customers who want to order a vehicle with a filter already installed, sources at many brands say. If a diesel model isn't available with the filter, customers mostly opt for a gasoline-powered vehicle.

Customers are also less attracted to diesel engines, which as a rule cost more than gasoline-fueled engines. Diesel fuel was once much cheaper than premium gasoline, but now it is nearing premium gas in price. So it takes longer for the diesel motor to pay for itself.

"Consumers who are especially price conscious are turning to more affordable gasoline-fueled vehicles in their purchases," said Citroen's Albrecht.

The trend toward higher diesel prices may only intensify. According to the European manufacturer association ACEA, half of the cars now sold in Europe are equipped with diesels. In 1990, it was 14 percent.

If refining capacity remains the same, the resulting rise in Europe's demand for diesel, along with a sharp increase in China's industrial use of oil distillates, may lead to a shortage in 10 years at the latest, say experts studying future pricing trends.

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