In 1989, the Volkswagen group debuted its first turbocharged direct injection (TDI) engine at the Frankfurt Motor Show under the hood of an Audi 100. It was revolutionary, with good power and good fuel economy at 5.6 litres/100 kilometres combined.
You could say the engine was ahead of its time; nine years to be exact. Because almost a decade later, the European Union and the European Automobile Manufacturers Association would agree to lower CO2 emissions on its roads with tax exemptions that made diesel more cost-efficient than gasoline.
It would spur other car makers to develop their own diesels, which, along with the lower fuel price, would spark Europe’s embrace of the diesel-powered passenger car.
Here in North America? Not so much.
As gas prices soared in the late 1970s and early 1980s, the early generation of diesel passenger cars on Canadian roads were slow, sooty and smelly, with chugging, vibrating engines that made it feel like driving a truck. As gas prices dropped, so did the public’s interest in diesel.
Today, you’d be hard-pressed to differentiate a diesel from a gas-powered vehicle. There’s no smell, with just a soft tick-tick-tick from the engine – you don’t even have to warm the glow plugs. In fact, they have more torque than comparable gas engines and are often quieter and smoother running, partly because they operate at a lower rpm than a comparable gas version. That’s on top of getting 30-35 per cent better real-world-driving fuel economy. Any diesels sold in North America must meet emission standards of the California Air Resources Board (CARB), the most stringent in the world.
However, you’d be hard-pressed to find anyone who knows this. Diesels make up about half of all car sales in Europe, but the engine has only a 3 per cent share of the North American market. It still can’t shake the perception of being agricultural, and that’s something auto makers are trying to change.
Education is key and the company has proved that by hiring someone to explain diesel’s virtues – in this case specifically for its fleet sales – says Darren Maloney, director of sales at Volkswagen Canada. VW is the largest seller of diesel passenger cars in North America.
“Before we had somebody dedicated to talk with [fleet owners], these companies wouldn’t have considered diesel,” says Maloney. “But they also think about resale value; they work on a cost-of-ownership model, and they’re looking for the lowest cost of ownership over the cycle of the car. And we demonstrate that, when you combine the fuel economy and the resale value, the total cost of ownership is better than a lot of comparable gas models.”
Though the diesel option adds between $1,500 and $2,500 to the price of a car, their engines are more robust and last longer. This factors into resale value, which has proven to be better than both gasoline and hybrid cars.
VW’s strategy is working. “The percentage for diesel right now is about 30 per cent of our total [Canadian] sales,” Maloney says. “Our total fleet sales are about 5 per cent, and of that number, 50 per cent are diesels. So you see they [corporate fleets] understand it a little better.
“The difficult part now is to do that to the broad consumer market out there, and to try to get that whole message across in today’s market is very difficult.”
In Canada, Chevrolet, Dodge, Mercedes, Audi, BMW and Volkswagen offer diesel passenger vehicles. But the strict emission regulations, along with the low sales volume, make it difficult for other manufacturers to offer diesel cars.
Nissan sells a range of diesel vehicles in Europe but, as Christian Meunier, Nissan Canada’s president, says, it’s not just a matter of shipping them over here. “We’re looking at [the North American market]. The only thing is to make them compliant with North America [emission and vehicle safety standards]. To make it compliant, investments are very, very significant, it’s not a small change, it’s major, major change. Obviously, you need a critical mass, you need to be able to sell significant volume.”
The only firm plan for Nissan is a new Titan with a diesel option coming in 2016; it’s also toying with a mid-sized, diesel-powered Frontier pickup concept that is being shown to dealers and others for evaluation (“They would love to have it tomorrow,” Meunier says). Both are powered with engines by Cummins, which specializes in commercial applications.
Fuel prices also factor into the disparity of diesel sales between North America and Europe. Diesel was priced at a Canadian average of $1.308 on July 22, while gasoline was $1.33, according to Natural Resources Canada. The two are roughly the same these days, though diesel has been higher recently. In the United States, diesel hovers around 25 cents more per gallon than gasoline.
However in Europe, diesel fuel is generally taxed far less and is cheaper than gasoline. Recently, for example, Germany priced diesel at €1.434 ($2.073) and gasoline at €1.635 ($2.364) per litre. Though both fuels there are far more expensive than in North America, European diesel drivers tend to see more immediate savings at the pumps.
Additionally, not every fuel station in Canada carries diesel, an inconvenience for owners. And while the cars themselves do not smell any more, the fuel still does, even the ultra-low sulphur diesel used today.
But all is not bleak for this overperforming, underappreciated powerplant. Volkswagen has seen a slow but steady rise in diesel sales for the past 10 years. And overall diesel sales in the United States are up 25 per cent so far this year, according to Hybrid Cars.com and Baum and Associates – outpacing the increase in sales of gasoline-powered vehicles. That means diesels are still in the 3-4 per cent range in overall sales, but it’s a start.
The United States has set a goal for manufacturers to have a corporate average fuel economy (CAFE) of 54.5 mpg by 2025, and auto makers will be desperate to develop more fuel-efficient cars to offset the gas-guzzling trucks and SUVs they make so much profit on. Those products will spill into Canada.
But will Canadians buy them?
“Canadians are very pragmatic, so there’s definitely potential,” says Meunier. “You see hybrids are successful in the U.S., but not so much in Canada. You need to prove your case, the emotional component is important, but it has to make sense financially.”
Perhaps it will take a generational change to shift perceptions, but Maloney says that having more options available to consumers would make a difference toward changing attitudes.
“If more car makers can bring them in, then diesel cars will be more well known and it would actually help us,” says Maloney. “Those who discover diesel typically stay with it. And I think they stay with it for more than just the economic reasons.”
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