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Diesel cars are dead

By Toby Hagon, 26 Oct 2016 Car News

Diesel fuel cap

The diesel bubble is popping, and passenger cars are the first to wave farewell.

THE updated Mazda 3 is one of the highest profile examples of a slowdown in sales of diesel passenger cars in Australia.

Despite the 3 being one of the top-selling cars on the market, Mazda has dropped the diesel-powered XD variant due to slow sales, instead focusing on the petrol models that account for thousands of sales each month.

Mazda Australia marketing director Alastair Doak said the price of the diesel 3 – it was the most expensive model and some $4000 dearer than its petrol equivalent – didn’t help, as did the fall in the price of petrol.

“The fuel price fell, so if someone was buying the diesel as a blend of performance and economy, diesel carries a premium, so that didn’t help its cause,” Doak said, adding “it was a bit of a distraction … and hard to make sure you had stock on the ground in the right places”.

BMW, too, has experienced a decline in diesel passenger-car sales, prompting a review that led to the decision to drop the BMW 220d Coupe.

BMW Australia product planning chief Shawn Ticehurst puts the swing away from diesel down to improvements to petrol engines; almost all petrol engines out of Europe now have turbochargers for reduced fuel use and improved performance, particularly torque.

“Petrol engines are now so good,” Ticehurst said. “People got into diesel and loved what they were when there was a bigger difference, and now the petrol engine technology has caught up.”

Despite the shift away from diesel passenger cars, carmakers are still seeing strong sales for diesel SUVs. In large SUVs, in particular, the market is heavily skewed towards diesel.

“Diesel is really strong in SUVs,” said BMW’s Shawn Ticehurst. “X5 30d is our biggest seller, BMW X3 20d is our second biggest seller.”

Mazda’s Alastair Doak said diesel is “a more natural fit” for SUVs, but that it had come off from its highs of a few years ago.

The price of fuel “isn’t as top of mind” as it was when fuel prices were higher, Doak said, “so not as many people are automatically ticking the diesel powertrain box”.

No one Which Car spoke to was prepared to link the diesel slowdown with the Volkswagen Dieselgate scandal.