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Diesel car sales set to overtake petrol in Europe

Diesel will replace petrol as the primary fuel for cars throughout Europe this year, if diesel sales continue to rise at their current rate.

The latest quarterly pricing survey by PricewaterhouseCoopers and shows that diesels accounted for 49% of the total European car market at the end of 2005.

Prices for diesel cars continued to rise more quickly (by 3.5% a year) compared with those for petrol cars (3.2%) in the final quarter of 2005, although the overall rate of price increases slowed as sales weakened. New car sales fell in 13 out of the 19 countries covered by the PwC survey.

Overall, average prices at the end of 2005 were 3.4% higher than a year ago (in Q3 the average annual rise was 4.4%), while the total market was down by 0.6%.

Chris Hibbs, UK Automotive leader, PwC, said: “Although diesel car sales will undoubtedly outstrip those of petrol in the coming year, the debate continues on the ultimate level of penetration they will achieve. They could potentially achieve 55-60% of the total market but the extra costs of making diesels to meet tougher emissions requirements means buyers will still have to pay a premium over petrol versions.

“Fuel prices will be another factor. Demand for diesel models tends to be higher in markets where there is the largest price difference between petrol and diesel. Varying levels of diesel fuel taxation between countries will always be a constraint.”

#AM_ART_SPLIT# UK market summary

New car prices in the UK rose slightly faster than the European average in the last quarter of 2005 - at an annual rate of 3.9%. Overall, the average price of a new car in Britain is 2% higher than in the euro currency zone.

UK new car prices rose despite declining sales in nearly every market segment and body style, which saw the total market dipping more than 4% below the previous year. Even sales of MPV models, which had been strong, fell. Only SUV sales surged ahead.

Price increases were consistent across all market segments - slightly higher in the executive and luxury segments. Price increases for petrol models kept pace with those of diesel, although petrol sales fell by nearly 11% while diesel volumes increased by almost 8%.

Diesels now account for 36% of the total UK market; this figure is below the European average. This is partly due to the fact that the UK is one of the few European markets where diesel is more expensive than petrol fuel.

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