Fleet News

Diesel car supply under threat

MANUFACTURERS have massively underestimated demand for diesel cars, prompting a global shortage which looks set to impact on UK fleet sales. With the move to a carbon dioxide emissions-based benefit-in-kind tax system in April next year fleet demand for diesel cars, which have lower CO2 ratings than petrol vehicles, is expected to soar from last year's 17% level.

And this week Vauxhall chiefs said they expected diesel demand in the UK to rocket to an all-time high over the next few years - soaring past the one-in-four of all fleet new cars bought seen in the early 1990s - as fleets and private buyers react to the combined pressures of new CO2-based taxes and rising fuel prices as well as improving diesel technology. However, manufacturers are finding it impossible to meet demand with BMW and Land Rover both facing up to diesel engine shortages this week following similar warnings from Ford earlier this year.

Land Rover is having to cut production of the Freelander by 10,000 vehicles (12%) and seek up to 250 redundancies because it cannot get enough diesel engines from BMW to meet demand. The German company supplies Ford-owned Land Rover with 32,000 diesel engines a year. Although Ford has revised Freelander production plans to take account of increased diesel demand, BMW can only supply a further 1,500 engines in the first quarter because it cannot meet its own needs. Land Rover had asked for 45,000 diesel engines this year.

BMW (GB) managing director Jim O'Donnell told Fleet NewsNet: 'Diesel demand is phenomenal in every sector of the market. Drivers who have not considered diesel before are doing so because it is financially so attractive - particularly for high mileage drivers. We cannot keep up with demand.' He said waiting lists for any BMW diesel car were at least three months and for some models, including the 3-series diesel touring, it could be longer.

Ford is investing about £500 million to turn its Dagenham factory into a global diesel centre when Fiesta production ceases late this year. The company changed plans to introduce common rail versions of the Focus and Mondeo at the same time because of a shortage of fuel injectors. The new diesel Focus should go on sale in late spring, but the common rail Mondeo will not reach showrooms until September.

Peugeot, Britain's number one diesel manufacturer, said the company was meeting current demand for diesel, but warned that a mass switch to the CO2 tax-beating fuel could catch the industry out. A spokesman said: 'Supply of diesel engines is not an issue for us at the moment but this isn't to say it won't be in the future.' Volkswagen believes it has done enough to meet current demand. A spokesman said: 'We have just launched two new TDI PD engines, and we expect diesel to account for 50% of Passat sales.'

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee