Re-Introduction of Diesel Vehicles to North American Markets Could Boost Automotive Sector

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Researched by Industrial Info Resources (Sugar Land, Texas)--North American automotive markets experimented with diesel vehicles decades ago and were unable to grab a significant enough share of the global market to be a viable option for automakers. However, diesel vehicles are beloved in Europe, accounting for almost half of the continent's vehicle sales. Thanks to new technologies and government-mandated mileage-per-gallon increases, diesel is poised to make a major return to the North American markets. If the technology takes off, it could lead to significant increases in investment among automakers at their North American assembly plants.

In 2013, more than 20 new diesel models will be unveiled in North America from both American automakers and their foreign competitors. Diesel offers significantly higher mile-per-gallon ratings, which automakers believe will appeal to consumers as oil and gas prices remain high. In addition, new technologies have eliminated many of the problems that drove diesel vehicles from North American shores so many years ago. Advances in high-pressure injectors and turbochargers, combined with low-sulfur fuels, have helped to eliminate the diesel smells, increase performance, and soften noises and vibrations.

Performance improvements mean that today's versions of the diesel vehicle are capable of matching, if not exceeding, the traditional gas engine in acceleration and torque, which will be a major selling point in the coming months. Couple those improvements with the mileage-per-gallon increases when compared with gas engines, and consumers will have to take a hard look at the new diesel vehicles. The drawback will remain the increased price associated with diesel vehicles. A diesel engine in a new vehicle can cause the sticker price of the vehicle to increase by as much as $7,000, and while diesel prices at the pump are also higher, typically similar to the cost of high-performance gasoline, the diesel vehicles are usually capable of going farther on a single tank of fuel.

If this round of diesel vehicles begins to see significant sales, the automotive sector could see a significant boost in spending in the coming year. Automakers will have to take a hard look at how they can expand their diesel offerings, which probably will mean additional retooling at engine, powertrain and assembly plants to meet market demand. Automakers have been trying to sell consumers on hybrid and even electric vehicles for a while now, but if European sales are any indicator of how diesel sales could trend in North America, the new diesel vehicles could be outselling hybrids soon.

If consumers buy into the new round of diesel, it could mean even higher sales for the automakers in North America, where vehicle sales have been booming for quite some time. Automakers are always looking for methods of improving their sales outlook, and diesel could be the next great thing, at least until they find a way to offer a wider variety of electric or electric-hybrid vehicles to consumers. Initially, the improved diesel trucks should be big sellers with the farming and construction communities, and diesel cars will offer commuters new options for fuel efficiency and fuel savings. Given that virtually all of the bets the automotive sector has made since the end of the recession have paid off, the odds are that diesel will become part of the new automotive reality in North America.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.