Diesels for the masses on the horizon for Canada

If you buy an electric car in Ontario, Quebec or British Columbia, you get a taxpayer subsidy of at least $5,000, and more than $8,000 in Quebec. Buy a fuel-efficient diesel that meets the latest, strictest passenger car emissions standards and you get…hit with a price premium on a ride that is 20-40 per cent more fuel efficient than a comparable gasoline car or light truck.

This, of course, makes no sense if the goal is to improve the fuel economy in ALL passenger vehicles. It does make sense if politicians and their regulators want to support the electric car business. Draw your own conclusions.

Nonetheless, new car buyers anxious to cut their fuel bills are increasingly turning to diesel as an option. Allen Schaeffer, the Executive Director of the lobby group Diesel Technology Forum points out that during the first six months of 2012, clean diesel automobile sales increased 27.5 per cent in what had been a diesel-reluctant United States.

That figure is based on new sales information compiled by HybridCar.com and Baum and Associates, notes the Diesel Technology Forum.

 “While clean diesel auto and light truck sales total about three per cent of the total U.S. passenger car market, the steady double-digit monthly sales increases show a definite trend of interest in diesels,” says Schaeffer in a release, adding that “Despite some volatility in the auto market, clean diesel auto sales have increased in 22 of the past 23 months with double-digit increases in 20 of those months. And diesel auto sales increased by more than 30 per cent in 12 of these months.

The diesel sales picture in Canada is quite similar. Diesels account for about three per cent of new light vehicle sales here, which is far, far below the 50 per cent diesel sales rate in Europe.

Diesels will never hit 50 per cent of the market in Canada, but as Schaeffer points out, “With more than 15 new clean diesel models designated for the U.S. in the next two years, I fully expect diesel sales to increase even more extensively in the near future.”

There’s no great secret to what’s driving buyers to think about diesel. A recent Pike Research study quoted by the Forum is one of many studies pointing to rising fuel prices and tougher, more stringent fleet-wide fuel economy regulations. Both are sparking demand for clean diesel vehicles around the world. 

The Forum notes that Pike is forecasting sales of clean diesel vehicles will increase from 9.1 million in 2012 to 12.1 million annually by 2018. Clean diesels – those that use low sulfur fuel and have specific treatments for tailpipe emissions – will represent 12.4 per cent of all light-duty vehicle sales by the end of 2018.

Naturally, this means the number of diesel models for sale in Canada and the U.S. will grow. Substantially.

This fall Porsche will introduce its first diesel into Canada in a 2012 Porsche Cayenne. The Forum reports that in 2013 Audi will offer a diesel option in the A6 sedan and the Q5 crossover, while an A4 diesel model is coming in 2014 or as early as 2013.

BMW has announced that the U.S. market will see a 2.0-litre four-cylinder diesel and 3.0-litre inline six diesel engine in the next 12 months, and Canada can expect to get the same. Chrysler plans to launch its new Jeep Grand Cherokee Ecodiesel in 2014, along with a new version of the discontinued Dakota pickup that will include a diesel.

And the Forum also reports that Ford will offer a new diesel Transit full-size commercial van in 2013 and General Motors has plans for a Cadillac ATS diesel and a diesel version of the Chevrolet Cruze in 2013.

Mazda plans to leapfrog its Asian rivals by selling diesel cars in Canada and the U.S. late next year. Look for Mazda’s SKYACTIV-D 2.2-litre clean diesel engine. The Forum suggests that other possible new diesels for North America include a Mini Cooper, a Volkswagen Tiguan TDI, a Kia Optima and a Land Rover.

One of the real diesel pioneers in Canada has been Mercedes-Benz. This year, Mercedes introduced the ultra-luxurious S350 BlueTec ($109,900) and Mercedes plans to add more models to its diesel fleet, including oil burners in the GLK crossover and even the C-class passenger car.

Tim Reuss, the president and CEO of Mercedes-Benz Canada, says Canadians embrace diesels in a way that would make Europeans proud.

“Eighty per cent of M-Class sales in Canada – diesel. Canada is much more European for styling and for diesel acceptance,” he says.

     Aside from the M-Class, Mercedes Canada also sells a diesel E-Class sedan (2012 Mercedes-Benz E350 BlueTEC), a diesel SUV even larger than the M (2012 Mercedes-Benz GL350 BlueTEC), a large diesel R-Class wagon (2012 Mercedes-Benz R350 BlueTEC), a luxurious S-Class sedan (2012 Mercedes-Benz S350 BlueTEC 4MATIC) and even a diesel Sprinter utility van.

     Years ago Mercedes took stock of Canadian tastes and chose then to push diesels into the Canadian market is a very big way. This sales plan was far different than the approach Mercedes has been taking in the U.S. Down south, diesel for decades has been a dirty word – at least when it comes to passenger vehicles.

Americans as a group associate diesel with nightmarish black smoke, clattering engines, lousy reliability, smelly exhaust and endless unpleasant fuelling experiences – including higher pump prices for diesel and the need to often use truck stops for a fill-up.

One of the great differences between Canadian and U.S. buyers is the diesel connection. That is, Canadians connect with diesel for very sensible reasons: today a diesel car or light truck has a range of 1,000 km or more, which means longer runs between fill-ups. Diesel is readily available across the country and at the same filling stations used by gas cars. And unlike in the U.S., diesel fuel is at par with gasoline, or even cheaper.

Diesels make perfect sense as an interim technology designed to help car companies meet those tough 2016 corporate fuel economy regs. For their part, buyers in both Canada and the U.S. are on the brink of embracing oil-burners like never before.

Diesel cars, after all, are 20-40 per cent more fuel efficient than their gasoline counterparts and the Forum argues that better fuel economy leads to a reduction in the CO2 footprint, too. And in an effort to push the “green” diesel argument, the Forum also notes that standard diesel cars “can use renewable diesel fuels like biodiesel which reduce greenhouse gas emissions up to 60 per cent and also reduce petroleum consumption.”

On top of that, the Canadian Black Book reports that the resale value of diesel vehicles is typically higher than for comparable gasoline-powered vehicles. That’s because diesel engines last so long. It’s not unusual for a diesel to keep chugging away well past 300,000, 400,000, even 500,000 km with no discernible loss of power and utility.

What can stop diesels? A price premium of at least $2,000 and sometimes much more, for one. Even tougher emissions regulations that will raise the price premium, is another. On top of that, the political will is behind electric cars, not diesels. And in the car business, legislators and the regulators usually win out.

So if you want a diesel now or in the next few years, the time to act is here. That is, until some car company arrives with a diesel-electric hybrid!