The manufacturer's UK managing director, Tod Evans, who last month gave an unequivocal reassurance that the media-hyped 10-15% cut in new car prices would not happen at Peugeot, has vowed that the traditional price gap between diesel and petrol-powered models will be narrowed on all ranges to between £300 and £500 over the next 12 months. The initiative is intended to reduce the ownership cost of a diesel to what it was five years ago, when the premium could be recouped after 25,000 miles, compared with 50,000 miles today as a result of higher duty on diesel fuel - two and a half times the European Union average.
Peugeot's common rail HDi diesels currently cost about £1,000-£1,250 more than petrol models with similar power outputs. The premium reflects the higher cost of manufacturing diesel engines, according to Peugeot. Diesels accounted for 23% of the UK new car sales in 1997. By the end of last year market share had slumped to 12%.
Peugeot says this is as a result of fiscal penalties fuelled by a campaign of 'misinformation' and fears further penalties will be imposed on diesel when new carbon dioxide-based vehicle excise duty and benefit-in-kind taxation regimes are confirmed.