Automakers Halt Diesel Plans for U.S. Market

No less than six major automakers – the U.S. and Japanese Big Three – have halted their diesel projects for the U.S. due to the carnage of the automotive market in the last year, focusing instead on development of hybrids and electric cars.

Automotive News reports that Chrysler, Ford, General Motors, Honda, Nissan, and Toyota have all stopped their U.S. diesel programs because of financial problems and limited development dollars. Only the German automakers – Audi, BMW, Mercedes-Benz, and Volkswagen – have followed through with plans to bring diesels to the U.S. market.

While Europe heavily taxes gasoline to create demand for diesel and diesel-powered vehicles, which get better mileage, U.S. consumers have little reason to shell out extra dollars to pay for the premium fuel diesel-powered vehicles demand.

While gasoline is typically more expensive (last summer’s stratospheric rise in diesel prices notwithstanding), U.S. consumers have yet to dispel the stigma of the noisy, stinky diesel power vehicles of the past. In addition, more complex and expensive parts make diesel engines more costly to repair when they break down.

“One of the obstacles of the diesel is the aged perception that the diesel is smoky and stinky,” says Toyota spokesman Curt McAllister. “It’s hard to change the mind-set of consumers. Hybrid technology has such a clean halo to it.”

Toyota is among many automakers focusing on hybrids (and direct-injection gasoline engines, in Ford’s case) to help it meet new fuel-efficiency goals set by the Obama administration in the U.S.

“We are banking heavily on hybrids,”McAllister said.

Despite their advantages, it’s unlikely that diesels will become mass-market in the U.S. unless the price of gasoline increases dramatically. Only the Europeans would be ready for such a scenario – their diesels are mass-market in Europe, and they can successfully bring diesel-powered cars to the U.S. while saving money through production volumes.

Source: Automotive News


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