Sales of diesel cars rising at fast pace

Volvo agent Wearnes Automotive sold 52 diesel cars in 2013, 530 last year and 444 in the first half of this year. The diesel car population has outstripped the number of CNG cars and is expected to overtake hybrids soon.
Volvo agent Wearnes Automotive sold 52 diesel cars in 2013, 530 last year and 444 in the first half of this year. The diesel car population has outstripped the number of CNG cars and is expected to overtake hybrids soon.ST PHOTO: AZIZ HUSSIN

Revised taxes, better technology, carbon rebates, lower running costs draw buyers

Diesel models have become the fastest-growing segment of cars, with interest fuelled by revised taxation, the carbon emission-based vehicle scheme (CEVS), lower running costs and an overall improvement in diesel technology.

According to Land Transport Authority data, there are now close to 5,000 diesel-powered passenger cars on the road - up from fewer than 150 five years ago.

With the quantum leap in growth, the diesel car population has now outstripped the cohort of cars that run on compressed natural gas (CNG) and is expected to overtake petrol-electric hybrids soon. There are now around 6,200 such hybrids and fewer than 2,000 CNG cars.

 

After being largely ignored in the last several decades, diesel cars began to sway buyers in 2013 when a special tax for such vehicles was slashed for cleaner models.

For Euro 5 diesel cars, the tax is 40 cents per cubic cm of engine displacement versus $1.25 for Euro 4. For those which did not meet Euro 4 emission standard, the tax was several times the vehicle's road tax.

CEVS - with rebates and penalties pegged to a car's carbon emission - was also rolled out in 2013, and made more stringent this year. As diesel cars produce far less CO2 than petrol equivalents, they qualify for CEVS rebates more easily.

A 130bhp power cap for Category A certificate of entitlement (COE) was also announced in 2013.

As diesel cars tend to produce less power but more torque, dealers began offering more such models two years ago. And consumers have warmed up to them.

Volvo agent Wearnes Automotive sold 52 diesel cars in 2013, 530 last year and 444 in the first half of this year. Peugeot agent AutoFrance said its diesel car sales doubled from 2013 to last year, and trebled from last year to this year. In fact, diesel cars now make up half of its total sales.

Shipyard manager Avery Yeo, 47, said he bought a diesel Peugeot 5008 because he lives in Bedok and works in Tuas. "I clock at least 80km a day," he said. "I get 22.2km per litre with the 5008, compared to 16km for my previous car, a Toyota Wish." And since diesel is also cheaper at the pumps than petrol, Mr Yeo said "it's really worth it".

The sums add up even for someone clocking a national average of 50km per day. A 1.6-litre petrol car would use around $4,000 of fuel a year, compared with $1,600 to $1,700 for a 1.6-litre diesel car.

Both estimates are based on pump prices before discount.

This fuel saving more than offsets the $763 premium in annual taxes the latter attracts, assuming it is a Euro 5 model.

Retired pilot Leonard McCully, 71, however, was drawn to his Audi A6 Avant 3.0 TDI more for its performance. "With 650Nm of torque, it flies," he said. "In fact, when I drove it on the first day, my wife asked why I was driving so fast.

"I've driven it to Phuket and it kept up with the (Porsche) 911s in the pack."

Watch dealer Leslie Chang, 52, said even though his Mercedes-Benz C200 diesel attracts more than $4,000 in annual taxes (because it is Euro 4) and "is a little noisy when idling", he still enjoys it.

He has done laps around Johor's Pasir Gudang race track, and the car performed well. Plus, it has a "feel- good factor" because of its low fuel consumption and carbon output.

Nanyang Business School adjunct associate professor Zafar Momin said diesel cars are even gaining a foothold in the US, a predominantly petrol market.

In Singapore, Mr Momin attributes diesel's meteoric rise to a host of economic reasons. But the biggest one, he said, was the power cap for Category A COE.

  "From a pricing standpoint, diesel models became much more attractive than the petrol versions that had been moved to Cat B," he said, adding that brands such as Volvo, Citroen, Peugeot and Renault "have clearly benefited".

A version of this article appeared in the print edition of The Straits Times on September 16, 2015, with the headline 'Sales of diesel cars rising at fast pace'. Print Edition | Subscribe