From: Gregory J. Wilcox, Daily News, Los Angeles
Published June 30, 2005 12:00 AM

Sales of Hybrid, Diesel Cars Projected to Soar by 2012

WESTLAKE VILLAGE, Calif. — In response to rising fuel prices, sales of new vehicles sporting hybrid-electric or "clean" diesel-powered engines are expected to increase dramatically over the next seven years, according to a report from J.D. Power-LMC Automotive Forecasting Services.

These vehicles will account for an 11 percent market share in the United States by 2012, up 7.1 percentage points from a 3.9 percent share last year, said the Troy, Mich.-based forecasting unit of J.D. Power & Associates, which is headquartered in Westlake Village.

Diesels will continue to rule in terms of buyer popularity, while hybrids will hold sway on showroom floors. Last year hybrids had a 0.5 percent market share, while diesels had a 3.4 percent share.

By 2012, diesels will account for a 7.5 percent share and hybrids a 3.5 percent share.

But the forecasters expect the number of hybrid electric models on the market to increase from 10 this year to 44 by 2012, while the number of diesel models is expected to grow from 14 to 26.

Anthony Pratt, senior manager of global power-train forecasting at J.D. Power-LMC, offers a simple answer as to diesel power's popularity: "It's proven technology, and it's known for its high torque and high durability. Automakers are still trying to educate consumers about hybrid technology."

Hybrids, and to some extend diesel engines, gained consumer appeal as fuel prices began climbing and eventually hit record levels, then retreated somewhat in many parts of the country. Oil prices have soared again, ending above $60 a barrel on Monday for the first time.

Pratt also said that the price premium consumers must pay for an alternative power-train vehicle could hamper sales.

And hybrid growth will be concentrated in sport utility vehicles and midsize cars, while diesel power will expand in SUV, pickup truck and luxury-car markets.

Brett D. Hoselton, an auto-industry analyst at KeyBanc Capital Markets/McDonald, said domestic manufacturers are well versed in diesel technology, and he also expects those engines to be the most popular of the alternative power trains.

In Europe, for example, where the domestic Big Three automakers are a force, diesel market penetration has increased from about 20 percent to nearly 50 percent in the last several years, Hoselton said.

"I think the hybrid is mostly hype. I think 'clean' diesel has tremendous potential."

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Source: Knight Ridder/Tribune Business News

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