• Jul 2, 2009
The new-car sales figures for June must be a cause for concern for fans of hybrids. But at the same time they're very encouraging for diesel proponents. You don't want to read too much into one month's sales numbers, but the numbers do tell a story.
Ever since gasoline prices tumbled from their highs of last year, sales of hybrids have tumbled along with them. And while most automakers are shunning diesel engines right now, Volkswagen turned in sales numbers in June that should make everybody sit up and pay attention.

So, are we going to see a battle royale between hybrids and diesels? It's too early to tell, but here's what's going on in the market at this snapshot in time.

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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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The hybrid market really isn't going anywhere.
The number of hybrids in the market keeps growing and growing, but there are more losers than winners. There are now 23 different models of hybrids in the American market. But most of them are turkeys that are selling very poorly.

For example, Lexus only sold 31 units of the LS hybrid last month. Chevrolet only sold 84 units of the Silverado two-mode hybrid. Nissan sold 666 units of its Altima hybrid. These are ridiculously low numbers.

And I'm not just cherry picking the worst examples. The hybrid market really isn't going anywhere. Hybrids still only account for 3% of all car sales and the Prius still accounts for half of them. Take the Prius out, and hybrid sales are truly inconsequential.

Meanwhile, almost every automaker has postponed plans to bring out diesel engines. GM, Ford, Toyota, Honda and Nissan all have smaller displacement diesels that are ready to go, but have been put on the back burner for now.

Mercedes, BMW, Audi and VW are the only ones really pushing diesels in the American market, and as the June sales report shows, VW has quite a story to tell.

Last month, diesels accounted for 80 percent of Jetta Sportwagen sales.
Last month, diesels accounted for 80 percent of Jetta Sportwagen sales, 40 percent of Jetta Sedan sales, and nearly 30 percent of Touareg sales. Overall, diesels accounted for over a quarter of VW sales last month.

That was for only one month of sales and one month does not a sales trend make. But those numbers have to be mighty encouraging to the people who are pushing for diesels.

Of course, diesel prices have fallen along with gas prices. And both those prices will definitely fluctuate in the future. But this shows how fuel prices have an extraordinary effect on the type of technology that will sell in the showrooms. Indeed, it shows the trouble automakers will have meeting fuel economy standards since they are at the mercy of a determining factor that is completely out of their control.

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  • 24 Comments
      • 5 Years Ago
      The big advantage to the current diesels on the US market is that they are normal vehicles. They don't look stupid and don't have to derive their economy from goofy shapes, pathetic performance, or other compromises such as stiff low rolling resistance tires. Another plus for the positive sales of diesels is that these cars aren't marketed as cheap econoboxes and they aren't in a self induced price war. Honda and Toyota in their idiocy are now racing to make the cheapest cars instead of the best cars. Both the Honda and the Toyota use a lame torsion beam suspension and the Honda uses archaic drum brakes. The performance of both the Insight and Prius is pathetic. They can put any price on it they want, I don't want those crappy drive components at any price. I want a car with the full mechanical refinements and I'm willing to pay for it. Bring out the VW Golf with the diesel and decent color selection and amenities and I'm buyin'.




      • 5 Years Ago
      I saw in one of my mags that they averaged 33 mpg in new Jetta TDI. I averaged 50 mpg in my Prius.
        • 5 Years Ago
        Not to mention that alot of those mags also have a tough time getting a Prius into the 40mpg range. I think the best I saw was an average of like 41mpg. This compared to the EPA rating of 46mpg combined.

        I've still yet to see a long-term test from a reputable source come anywhere close to that, much less beat it without having to resort to hypermiling.
        • 5 Years Ago
        I wouldn't put too much stock in the result from one test. After all, the idiots at Consumer Reports somehow managed to get only 11 mpg from a Jeep Liberty CRD they tested.
      • 5 Years Ago
      I have never owned a VW in my almost 50 years of driving. I bought a VW Jetta TDI sedan DSG in April. My 'pure' highway mileage ranges from 45 to 50 MPG and my overall average for 5,000 plus miles plus is 40 MPG. I am very impressed with the ride/handling and steering. I drove the Honda Civic Hybrid, as well, but preferred the overall performance of the VW. I did not drive the 2009 Prius, as from the reviews I read, it appeared to be too much of an efficient transportation appliance, rather than a "driver's" car. I just love the 236 ft-lbs. of torque at 1750 RPM. It is such a pleasure to drive on hilly roads. The hybrids , for me, have to rev to high to get their maximum torque.

      I love the Jetta and am so glad VW gave me the option of buying a modern clean diesel.
      • 5 Years Ago
      Hybrids help meet emissions standards. Diesels are a step back. The emissions standards are not static. The few diesels that can be sold here today have their days numbered.
      • 5 Years Ago
      It is good to see this surge in diesel in diesel sales.

      Looking back to Europe over ten years ago, in the UK which was traditionally very much a petrol market - buyers have switched over to diesel powered cars in vast number, so much so that diesel now accounts for more than 50% of sales. What changed ? Who knows, but mostly public perception - and the big advances that were made with turbo diesel and common rail engines which gave much higher performance and civilized refinement.

      Mainland Europe was a much earlier adopter of diesel power, but what happened in the UK just shows the possibility of what could happen in the US market.
      Once the public gets in their mind that modern diesel cars do not equal smelly/noisy/lacking performance then the demand will be present.
      • 5 Years Ago
      "Mercedes, BMW, Audi and VW are the only ones really pushing diesels in the American market, and as the June sales report shows, VW has quite a story to tell."

      The problem here is that you have to take the brand into account. #1, those three have a fairly long history with diesels, at least VW and M-B. #2, the buyers want a *VW* diesel, or a Mercedes-Benz diesel; there's no guarantee a Honda or Ford diesel car would interest them.
        • 5 Years Ago
        @Jim -
        I agree, but how did those brands develop this kind of fan base for their diesels? BY SELLING THEM! There has been some on and off availability of diesel VWs and MBs as they raced to keep up with the US regulations, but they clearly committed to the US diesel market at least as far back as the 80s.
        This can be used to show that if you sell compelling diesels, you can establish a solid market for them in the US. The trick now is, how long would it take (alternately phrased as how much will it cost) for other brands to establish that kind of relationship?
        Would you buy a first year diesel Focus, Fusion, or Malibu? What about a diesel Accord or Sentra in their first year of US-specific configuration?
        Now if US regulations allowed them to sell the exact same engines that have already established some history in other parts of the world, that would certainly reduce the perceived risk, but it doesn't look like that's an option.

        Oh well. Guess I'll stick with dreams for now of diesel Wranglers, smarts, and Foci, and keep my fingers crossed that VW decides to bring us the GTD.
        • 5 Years Ago
        Honda, Toyota, Volvo and Ford, has beem selling diesel in Europe for many years, for example, Honda diesel engine for Acord is considered as good as any german diesel, I have two volvo diesel XC 70 D5 and I can say that they have one of the best diesel engine I have ever drive in my life
        • 5 Years Ago
        You hit the nail on the head, Jim. I am interested in a diesel very much and am not too brand loyal, but the majority of people I talk to who like diesels are very big about liking their VW and think it's the greatest brand that ever was.

        On another note, I love that E-Blue SRT-4 in your profile picture. I have a 2004 Yellow SRT-4.
      • 5 Years Ago
      I love the VW comercial! great marketing!
      • 5 Years Ago
      Re : hybrids-----why?
      • 5 Years Ago
      McElroy,

      Hey, baseball bat on original Prius? That's what I drive!!!

      I get compliments from people that they like it because it is a normal looking car, not looking like the current sloped nosed Prius.
      • 5 Years Ago
      My Bro-in-law is in the process of buying a Prius at the moment. In his case, and in IMO it's the wrong vehicle for him. The reason, he keeps his cars forever. If you live in the city and trade every three or four years a hybrid makes sense. Otherwise the money spent is "throw away" money as the graph crosses for residual value vs. long-term upkeep.

      Enter the diesel. Say what you want, Americans buy VALUE. If the value perceived is greater for a diesel people will gravitate in that direction. Personally the 1975 argument is lame since the bulk of buyers out there were not even born during the GM-diesel issue. Certainly the cost per gallon plays into the decision and at the moment diesel is equal or cheaper. Flood the market with diesels and diesel fuel will most certainly be more expensive - at least in the short term until refineries ramp up.

      I'm not in the market for a new vehicle at the moment, resisting pressure from my wife who admits to having "Prius envy." Don't think I'd go that direction anyway as - for me - a hybrid just doesn't make sense. Now, if ford brought over their Focus Diesel, well, I'd be interested.

      Mfgr's have never tried very hard to MARKET their diesels in the U.S. You can bet they are watching VW, since VW's marketing appears to be paying off. And isn't VW the only "low-end" diesel available in the U.S? Those considering a VW are not the same people looking at a MB or BMW. Are there any diesels in between? And too, is is just me or does it seem like every time it appears the mfgr's are about ready to begin a diesel push in the U.S. the government tightens the emission requirements?
      • 5 Years Ago
      How is it not cherry picking to leave out the Prius? Especially when talking up the diesel poster child: Jetta TDI.

      So leave out the Jetta TDI on the diesel side and you will see the same thing. The rest of the diesel numbers are inconsequential.

      How do Jetta TDI sales compare to Prius sales.

      Over the past year, people have shown themselves to be ridiculously short sighted.

      You can practically predict average fuel economy of vehicles purchased that week, by looking at gas prices. Zero long term thinking.

      TDI sales had a hard time initially with high diesel prices, now with diesel undercutting regular, they sell like gangbusters.

      So WTH is up with Diesel pricing? Is it going to be cheaper in summer more in winter, is going to be similar to regular gas overall???

      As far as diesels being a high percentage of Jetta Sales. Frankly they should be 100%. I would only buy a VW for the diesel, as they have such a lousy reliability record and high maintenance costs that if I wanted a gas powered car, there are plenty of more reliable alternatives.

      FWIW I am considering a TDI, but with significant misgivings due to reliability/maintenance costs.
        • 5 Years Ago
        Quote from Snowdog:
        - "So WTH is up with Diesel pricing? Is it going to be cheaper in summer more in winter, is going to be similar to regular gas overall???" -

        Nothing is up with Diesel pricing, it's acting they same way it has for decades. Diesel is typically higher in the winter due to the increase in home heating oil demand sicne they are virtually identical products. Plus, historcally, diesel has been cheaper than or similiarly priced to Regular Unleaded. Seems we are now entering back into that reality after a few years of unusual diesel pricing.

        The radically high prices of last year and the slightly higher prices before that were likely due to refinieries getitng used to producing large amounts of ULSD since it was only mandated here recently(since about 2006 I believe, didn't reference that right now).
      • 5 Years Ago
      The ultimate would be a diesel hybrid. Unfortunately, the manufacturers are afraid to make a diesel hybrid because they think the greenies, those people who flock to hybrids, will hold their nose.

      Smart brought the diesel to Canada in 2004. It sold well, but when they brought it to the States a few years later, they gave it a bigger gas engine with no diesel option. Almost as if they felt Americans would go 'Ewww, a diesel." That same year, they dropped the diesel for Canada. Now the Smart car gets worse mileage than before. Ironic. The car whose whole reason for existence was primarily fuel economy, was changed to get less fuel economy while still being just as small.

      The resistance to diesel, at least in the US, was that great, or perceived to be that great. In Europe, the Smart car is still diesel. Perhaps the perception problem is not with the public, but with the auto manufacturers who still have a 1975 view of what people want.

      My father bought a MB 300D in 1975 and it is still going strong.
        • 5 Years Ago
        I agree that the automakers seem to be stuck with an antiquated idea of how well diesels will sell in the U.S. How do they know they won't sell if they refuse to give it a try? I would love to get a modern diesel, but don't want a Jetta and can't afford a BMW or MB.
        A lot of noise has been made that the reason automakers don't sell European diesels is meeting U.S. emissions standards, but I don't buy it. Even if the standards were the same, I think most automakers would still refuse to sell diesels here.
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