Alfons Egger, an Opel salesman for 30 years, has a problem. Germans have always valued high-performance cars. Now they keep asking for diesels.
The dealership where he works, Hausler in Munich, is Bavaria's largest Opel dealer. The dealership cannot get enough diesels. It is a similar picture all over western Europe this year as diesels set new sales records. 'Diesel orders peaked in August and September during the protests over fuel prices,' Egger said.
This year, diesels accounted for one-third of sales in western Europe, up from 27 percent last year. European motorists can buy diesel fuel for up to 25 percent less per liter than gasoline, while improving fuel economy up to 50 percent.
The sudden market shift has rewarded automakers with up-to-date common-rail diesel engines. Winners include BMW, Mercedes, Renault, Peugeot, Volvo and Volkswagen. As one might expect, losers include the automakers that suffer diesel production shortages, or who offer outdated technology. This group includes the Japanese automakers plus Ford and Opel.
The sudden popularity of diesels has played havoc with automakers' projected model mixes. For example, 50 percent of Renault Clio buyers want diesel engines, up from 15 percent a year ago. 'No one predicted such a big increase, and we are struggling to keep up with diesel production,' said Pierre-Alain de Smedt, executive vice president of Renault SA. 'I have been leaning heavily on my own production people and our suppliers.'
To keep pace, Renault expects to equip nearly half of its new vehicles with diesels. The French automaker plans to produce 1.4 million diesels in 2001, up from 850,000 units this year. This summer, Renault will introduce a new 1.5-liter common-rail diesel developed with Delphi Automotive Systems Corp. The company also has signed a new contract with Robert Bosch GmbH to guarantee an increased supply of diesel injectors.
Consumer demand has surprised even those industry analysts who expected a trend toward diesels. 'A year ago, we predicted diesels would take 33 percent of the western European market by 2002,' said analyst Peter Schmidt of AID, a consulting firm in Warwickshire, England. 'People told us we were being far too optimistic. Now it's reached 32 percent already. With rising fuel prices, people have realized that diesel is not only cheaper but more technologically advanced than ever.'
Winners and losers
Winners include automakers with the latest common-rail technology, such as Volkswagen, Fiat and Peugeot. By contrast, Japanese automakers are falling behind. Minimal demand for diesels in North America and Europe gave Japanese automakers little incentive to upgrade obsolete technology. Moreover, European sales quotas - which finally were lifted last year - meant that Japanese automakers could not hope to sell enough cars to justify development of new diesels. 'The problem for the Japanese is that they have not had to keep pace,' Schmidt said.
Mazda, Honda and Mitsubishi have been hit hard, while Nissan held its own. Only Toyota has prospered, with a 17 percent increase in sales fueled by the success of the newly introduced Yaris minicar. 'Our customers are not really diesel drivers,' said Werner Kohlert, owner of the Drahovsky Toyota dealership in Munich. 'Most are private buyers with low annual mileage, so diesels don't make sense for them.'
Because of high German taxes on diesel cars, diesels make financial sense only for those driving more than 25,000 kilometers per year. Toyota recently introduced a common-rail diesel, but Kohlert did not even display it in his showroom. 'It simply isn't a promotional priority,' he explained.
The diesel shortage is not restricted to Japanese niche vehicles. Sales of the Opel Astra - one of Europe's high-volume cars - are down 100,000 units in the first three months of this year. A shortage of diesel engine models is partly to blame. Opel's Kaiserslautern engine plant in Germany can produce 300,000 2-liter and 2.2-liter diesels a year, but consumers prefer smaller engines.
Opel could solve that problem by purchasing small diesels from Fiat. That is a possibility in the wake of the Italian automaker's alliance with General Motors. In fact, Fiat's 1.2-liter multi-jet diesel engine will be available to Opel in 2002. 'We are considering the application of Fiat diesels for use in Opel models,' an Opel spokesman confirmed.
Back at the Hausler dealership, Egger admitted to a shortage of diesels, not just for Astra but for the popular Zafira as well. The most significant factor affecting diesel sales at Hausler is the limited availability of diesels with automatic transmissions. Explained Egger: 'There is no diesel automatic option for the Corsa, and only the small Astra diesel is available with an auto box.'
You can e-mail editor Chris Wright at [email protected] Elaine Catton and Wim Oude Weernink contributed to this report