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In a new report, corporate analyst Schroder-SalomonSmithBarney boosts its Euro diesel car share forecast to 45% in 2005, up from a 42% forecast last year, based on continued soaring growth in diesel vehicle demand.

Euro diesel car sales jumped another 12% last year, as consumers continue to respond to huge improvements in diesel performance technology and continuing big advantages in fuel economy versus gasoline. Trends indicate that diesels should hit 50% share in a few years, probably stabilizing around that mark.

"The wider availability of diesel fuel with lower sulfur content should also be helpful in heading off health concerns" about dieselization, as ultra-low sulfur diesel (ULSD) is a "key enabler for the efficient use of NOx catalysts" while sulfur-sensitive diesel particulate filters (DPFs) also "may become necessary to meet tighter Euro V standards," it says.

Other key dieselization factors:

"We expect that fuel taxes will remain high in Europe as government continues to fight against spiraling traffic growth and congestion. Under these circumstances, diesel engine fuel economy is likely to remain in vogue with consumers...

"As diesel output continues to rise, we expect that diesel engines will become less costly to make relative to gasoline versions. This may prove particularly beneficial for small-displacement engines," the report says.

While world-wide diesel vehicle sales were about 10.5 million units last year, or 18% of the world light vehicle market, about half of these sales were in Europe, the report notes.

Another 2 million light commercial diesel sales went to Europe, while the remaining 3 million diesel light vehicles produced last year were sold principally as commercial vehicles in Asia.

"Several commentators including ourselves see potential for this non-European sales base to double to around 6 million [diesel] units by 2010," the report says. "The greatest potential seems to be in Asian markets such as India, where diesel is already available for commercial vehicles and where economic growth is expected to stimulate fast growth in car buying."

# posted by Medical Information : 4:19 AM