Rising pump prices are starting to hit the demand for diesel cars, according to market analysts. With diesel costing £1.30 a litre compared to petrol at £1.17 and the price gap widening, the escalation in oil burner sales, which began in 2000, could be drawing to an end.
New research by Cap Monitor revealed dealers have noticed a cooling in customers’ enthusiasm for diesel models with just 4 per cent believing demand was still rising. One in four felt the cost of fuel was putting more customers off diesel engines while 15 per cent said buyers were staying away from diesel. However 47 per cent of dealers said there had been no change in demand and 9 per cent did not know or were not applicable. A spokesman for Cap said: “You have to do huge mileages to make diesel worthwhile.” He said 69 per cent of 100 used car dealers surveyed had also found spiralling fuel costs were persuading customers to buy smaller engined cars with just 4 per cent saying they had not noticed this trend. A further 5 per cent said their customers had not started downsizing yet but believed they would do so in future but one in five said car owners would “continue to drive what they want”. Jason King, head of market intelligence at EurotaxGlass’s, said the higher list price put buyers off small engined diesel cars. “Superminis don’t work for diesel. People do less miles and the technology is less refined,” he said. EurotaxGlass’s said the price disparity between running a petrol and diesel car was narrowing. It claimed the average three-year-old mid-sized family diesel car currently costs £600-£800 more than its petrol counterpart but the annual fuel bill was only £105 less. This means only after seven years will the lower fuel bills compensate for the higher purchase price. “For diesel cars to remain in favour, they may need to rely more upon driving characteristics than any compelling financial considerations,” said Adrian Rushmore, managing editor at EurotaxGlass’s.