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Global market review of dieseltechnology and markets– forecasts to 2013

2008 edition

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Global market review of diesel technology and markets – forecasts to 2013 2008 edition

by John Kendall and Oliver Dixon

May 2008

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Page iv Contents

Contents

Single-user licence edition............................................................................................................. ii Copyright statement .................................................................................................................. ii Incredible ROI for your budget – single and multi-user licences............................................... ii just-auto.com membership........................................................................................................iii

Contents.......................................................................................................................................... iv

List of tables ................................................................................................................................... vi

Chapter 1 Introduction.................................................................................................................... 1

Chapter 2 Emissions standards .................................................................................................... 3 Europe....................................................................................................................................... 3

Greenhouse gas (GHG) emissions .................................................................................. 4 The US...................................................................................................................................... 6

California .......................................................................................................................... 8 Japan ........................................................................................................................................ 9 Other markets ......................................................................................................................... 10

Chapter 3 Biofuels: sustainable substitution or red herring? .................................................. 12

Chapter 4 Diesel/electric hybrids ................................................................................................ 21

Chapter 5 Fuel injection technology ........................................................................................... 24 Fuel injection systems............................................................................................................. 25

Bosch.............................................................................................................................. 26 Delphi ............................................................................................................................. 27 Denso ............................................................................................................................. 27 Continental Automotive .................................................................................................. 28

Chapter 6 Global diesel markets ................................................................................................. 29 Europe..................................................................................................................................... 29 Emerging diesel markets......................................................................................................... 31

The US ........................................................................................................................... 31 Japan.............................................................................................................................. 34

Chapter 7 Manufacturing.............................................................................................................. 36 BMW ....................................................................................................................................... 36 Daimler.................................................................................................................................... 38 Fiat/GM ................................................................................................................................... 39

Fiat.................................................................................................................................. 40 GM.................................................................................................................................. 40

Ford/PSA Peugeot Citroën ..................................................................................................... 42 Honda...................................................................................................................................... 45 Hyundai/Kia............................................................................................................................. 45


Page v Contents

Mitsubishi ................................................................................................................................ 46 Renault/Nissan........................................................................................................................ 47 Subaru..................................................................................................................................... 47 Toyota/Lexus........................................................................................................................... 48 VW .......................................................................................................................................... 48

Chapter 8 Conclusion ................................................................................................................... 51


Page vi List of tables

List of tables

Table 1: Europe emissions regulations (g/km).................................................................................. 3

Table 2: US tier 2 emissions standards (g/km) ................................................................................. 7

Table 3: California emissions standards (g/km) ................................................................................ 8

Table 4: Japan exhaust emissions limits, 2005 and 2009 (g/km) ................................................... 10

Table 5: European Union diesel car registrations, 2007-2013 (actual and forecast units) ............. 29

Table 6: US diesel car registrations, 2007-2013 (actual and forecast units) .................................. 31

Table 7: Japan diesel car registrations, 2007-2013 (estimated and forecast units)........................ 34

Table 8: Diesel share of BMW registrations, 2003-2013 (%) .......................................................... 36

Table 9: Diesel share of Ford registrations, 2003-2013 (%) ........................................................... 42

Table 10: Diesel share of PSA registrations, 2002-2011 (%).......................................................... 42


Chapter 1 Introduction

Chapter 1 Introduction

Since the last edition of this report two years ago, the environment has started

to make a serious impact on manufacturers’ model plans. Global oil prices

have continued to rise, a pattern we can expect to see continue as we hit

global peak oil production, which is expected at some time in the next few

years.

The pressure to reduce greenhouse gas emissions has undoubtedly helped to

increase the popularity of diesel power for cars. Although direct-injection

gasoline engines offer reduced carbon dioxide emissions compared with

conventional indirect-injection models, direct-injection diesels still show a clear

advantage.

At the same time, diesel engine development and developments in emissions

control technology have helped lay to rest the image of diesel engines as low-

performance, high-polluting power sources. Current emissions standards in the

developed world ensure that diesel emissions are lower than ever for new

cars.

Pressure on carbon dioxide emissions in particular has started to push

manufacturers towards various forms of hybrid technology, and that is a trend

we can expect to see continuing in the coming years, while the quest for viable

alternative fuels continues.

This report is an update of the just-auto report published in 2006 and follows a

similar format. Much has changed in that time, including discussion about the

rapidly growing biofuels sector. The discussion is particularly relevant for

diesel cars because diesel fuel is produced in greater quantities than gasoline

from the available sources.

Forthcoming emissions limits are also beginning to shape diesel engine

design, with after-treatment now enabling diesels to meet even the most

stringent exhaust emissions limits in force or pending. At the time of writing,

there are currently no diesel hybrid cars in series production but the continuing

advances in battery technology and measures to reduce the cost associated


Chapter 2 Emissions standards

Chapter 2 Emissions standards

The emissions agenda is effectively set by the regulations in force and planned

for Europe, the US and Japan. In an ideal world, all countries would be

working to the same standards, but although all three sets of standards show a

gradual tightening of limits, measurements are made using different test

methods. This makes it difficult to make direct comparisons, while the

variations reflect local concerns.

For all that, emissions from all vehicles have been dramatically reduced in

developed countries following the introduction of emissions reductions

programmes over the past 20 years.

Europe

Table 1: Europe emissions regulations (g/km)

Emissions regulations standard Year CO HC HCNOx+ NOx PM

Euro IV 2005 xxxx - xxxx xxxx xxxxx

Euro V 2009 xxx - xxxx xxxx xxxxx

Euro VI 2014 xxxx - xxxx xxxx xxxxx

Source: European Commission

Euro V and Euro VI standards are now more or less fixed, although there is

still some discussion about particulate matter (PM) limits, due to be finalised in

July 2008. As it stands, PM emissions will be x% lower for Euro V than Euro

IV. With current technology, it is unlikely that the standard can be met without

using a diesel particulate filter (DPF). Although different limits have applied to

diesel and gasoline engines in the European Union since limits were first

introduced in 1992, for Euro V and Euro VI they are closer than ever before.

PM limits for direct-injection gasoline engines will be introduced for the first

time and are identical to those for diesel cars. NOx limits will be tighter for

gasoline engines, while carbon moNOxide limits will be tighter for diesels.


Chapter 3 Biofuels: sustainable substitution or red herring?

Chapter 3 Biofuels: sustainable substitution or red herring?

The efficiency of diesel engines is likely to ensure their survival as a means of

powering cars for some time to come. Rudolf Diesel designed the engine to

operate on a variety of fuels from solids such as coal dust to renewable liquids

such as peanut oil.

Biofuels are favoured by many car manufacturers, although there is no

universal agreement on a particular single source of the fuel. The commonest

sources include crops and other animal or vegetable sources which possess

high oil content and are capable of being processed into a diesel fuel. In

similar fashion, wheat, sugar cane or sugar beet can be processed to produce

bioethanol, usually regarded as an alternative to gasoline.

The diesel engine’s tolerance of a range of fuels means that it can be run on

alternatives to conventional fossil fuels, often without modification. Although

bio fuels are frequently described as being ‘carbon-neutral’, it’s a claim that

tends to disregard processing and transport.

When burnt, biofuels emit carbon dioxide, just like conventional fossil fuels, but

the crops from which these are produced absorb an equal amount of carbon

dioxide in the growing process. That might be so, but a scientific assessment

needs to consider the energy used to plough the fields, sow the crop, harvest

it, process it and transport it to the consumer, which can significantly alter the

carbon dioxide balance. The energy consumed by these processes can vary

considerably, depending on the processing method and the distances involved

in transport. But at least the fuel is renewable, unlike our available fossil-fuel

supplies. It may be harvested today and burnt tomorrow, but more can be

grown in its place.

In Europe, where more diesel fuel is consumed than anywhere else globally,

oil-seed rape is the popular choice for biodiesel. In the US, the soya bean is

the favoured source of fuel, while in other parts of the world, palm is the

preferred source. These three are classified as fatty acid methyl ester (FAME)

biofuels. Rapeseed oil may be referred to as RME (rapeseed methyl ester) and


Chapter 4 Diesel/electric hybrids

Chapter 4 Diesel/electric hybrids

Diesel/electric hybrids were discussed at length in the last edition of this report.

Whereas gasoline/electric hybrid cars such as the Toyota Prius and Honda

Civic have become established products, there remain technical and cost

barriers to the development of diesel/electric hybrids.

just-auto concluded in the last report that if hybrids’ raison d’être was to reduce

fuel consumption and greenhouse gas emissions, then the gasoline/electric

hybrid had no sensible place in Europe where some xx% of cars sold in 2007

were diesel powered. Our view has not changed.

At best, a gasoline/electric hybrid can only hope to match the fuel consumption

of a modern diesel, while its advantage would be swiftly lost in long-distance

driving where a diesel would return far better fuel economy, and without the

additional weight of an electrical drivetrain or the recycling issues presented by

hybrid battery packs.

The battery issue is being gradually overcome by a combination of improving

battery technology and the development of supercapacitors that are capable of

storing electrical energy but with a faster charge time and greater power

density. Further development looks promising, which would help to make

electrical power more viable for future automotive applications.

We suggested in the last report that since the largest proportion of efficiency

improvement in a hybrid vehicle remains the stop/start system, mild hybrids,

without the complexity of a separate electrical drive system could offer most of

the benefits of a conventional hybrid without the cost and technology

drawbacks.

It was that route which BMW pursued with its Efficient Dynamics system in

2007. In simple terms, models are equipped with an automatic stop/start

system (only applicable to four-cylinder engines with manual transmission at

present) and an energy recovery system, which converts energy otherwise lost

during deceleration or braking into electrical energy and stores it in the battery.


Chapter 5 Fuel injection technology

Chapter 5 Fuel injection technology

Fuel injection technology is critical to an engine which relies on compressing

the air in its cylinders enough to raise the temperature high enough to cause

combustion when fuel is injected. What the diesel engine offers is a high

degree of control over combustion by injecting fuel at precisely the right

moment.

As emissions regulations tighten, more precise control is needed and without

becoming too technical, it is desirable to have more injection pulses, both to

smooth the combustion process and to reduce the need for exhaust after-

treatment. It is the need for five or more injection pulses per cycle that has

effectively won the day for common-rail injection systems.

Because common-rail injection involves holding a relatively small volume of

fuel under constant very high pressure, it is the system best placed to deliver

multiple injection pulses.

Most diesel cars built since the turn of the century are fitted with common-rail

injection systems. The company that adopted the electronic unit injector (EUI)

alternative, the Volkswagen Group, began to switch over gradually to common-

rail injection in 2007. Because fuel injection is dependent on engine speed with

EUI systems, the technology is less well suited to multiple injection pulses,

even though EUI has provided higher injection pressures than common-rail

systems in recent years.

Applying a pressure amplification piston to the rail offers possible injection

pressures of xxxxxbar and above. But injection pressures have not yet risen

above xxxxxbar in production vehicles. This is partly because it will probably

not be possible to meet the future global emissions limits without employing

exhaust after-treatment.

But after-treatment is not an elegant technical solution. It is far better to design

an engine to meet the emissions limits rather than apply after-treatment to

make up for the engine’s inadequacies. Beyond that, exhaust catalyst systems

rely on expensive and increasingly rare platinum. If catalysts from cheaper

materials can be made or – better still – avoided altogether, that would be


Chapter 6 Global diesel markets

Chapter 6 Global diesel markets

Europe

Table 5: European Union diesel car registrations, 2007-2013 (actual and forecast units)

2007 2008F 2009F 2010F 2011F 2012F 2013F

xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx

Source: just-auto

Diesel cars now outsell those powered by gasoline within Europe. But it is the

speed at which this has happened that is perhaps most remarkable. In 1990,

just xxxx% of new cars sold within Europe were powered by diesel. In 2007,

that figure had climbed to xxxx%, as diesel overtook gasoline as the fuel of

choice during 2006.

Of the five biggest European markets for cars, Italy has seen the sharpest rise

in diesel penetration over the past ten years, although the pattern for

Germany, Italy and the UK has been fairly similar over the same period.

Factors influencing diesel penetration range from the annual distances

travelled, fuel price and, in the short term at least, incentivisation of the latest

emissions standards. Germany, for instance, has a history of offering

incentives to vehicle buyers if they opt for vehicles that conform to the next

round of emissions standards. If this can offset the price of the additional

emissions control equipment, it will encourage buyers to opt for the cleanest

cars available. It is a policy that works.

With over xm diesel cars being sold in Europe each year, there can be little

doubt that the genre is firmly established. But there are pressures now in play

that may serve to slow down the penetration rate.

Much of the growth in popularity of diesels may be attributed to one factor. For

many years, diesel has been markedly cheaper than has gasoline throughout

most of Europe, with only the UK bucking this trend. The differential is now

changing, and there is now virtual price parity across the continent. As such,


Chapter 7 Manufacturing

Chapter 7 Manufacturing

In this chapter we will review the major diesel car and engine manufacturers,

plus alliances and recent innovations. Almost inevitably, diesel car

manufacturing is centred on Europe, where every major manufacturer

represented in the market offers a diesel engine. The only exception is Proton.

The mainstay of most manufacturers’ diesel ranges is a four-cylinder engine

with the most popular engine sizes in the xxx- to xxx-litre range. Since our last

report, power ratings have increased, quite markedly in some cases.

BMW

Table 8: Diesel share of BMW registrations, 2003-2013 (%)

Actual Forecast

Diesel share (%) 2003 2005 2006 2009 2011 2013

France xx xx xx xx xx xx

Germany xx xx xx xx xx xx

Italy xx xx xx xx xx xx

Spain xx xx xx xx xx xx

UK xx xx xx xx xx xx

Japan x x x x x x

US x x x x x x

Source: just-auto

BMW’s Efficient Dynamics strategy is applicable not only to its diesel-powered

cars, but it is the kind of efficiency improvement technique that we can expect

to see across the spectrum from vehiclemakers over the next few years.

Without resorting to a separate battery pack and separate electric drive motor,

or the complex electrical architecture required of a serial or parallel hybrid, the

company has taken the most energy-efficient elements of a hybrid and

incorporated them in a conventional car.


Chapter 8 Conclusion

Chapter 8 Conclusion

Fuel prices continue their steady upward rise, while legislative pressures

ensure that the cost of driving is also set on the same course. The inevitable

conclusion is that we are witnessing the end of the era of cheap motoring. Or

are we?

As this report outlines, it is possible to continue the drive for lower fuel

consumption cars without making them less interesting or rewarding to drive.

This can be achieved by adopting cost-effective on-board systems without the

need for a full hybrid system with the associated cost, weight and recycling

issues associated with current technology.

Such developments almost inevitably favour the diesel engine because of its

inherently greater efficiency than the gasoline engine. But the additional cost of

after-treatment could add significantly to the cost of a diesel that will comply

with emissions regulations from around 2010 onwards.

That will be less of a problem for higher-cost and higher-specification premium

models, where buyers will still be prepared to pay more for the perceived

advantages those models bring, or pass the costs on to their employers.

Legislation to reduce carbon dioxide emissions around the world will still

continue to stimulate the diesel car market, particularly for premium models. In

Western Europe, diesel-powered variants account for the vast majority of large

cars and SUVs on the road already. That trend is likely to continue.

At the more price-sensitive end of the market, the need to contain cost is not

likely to favour diesel models in the same way. Diesel penetration has

traditionally been lower for smaller models, mainly because they are generally

used to cover shorter distances and the fuel consumption advantages are less

important for models which generally have relatively low fuel consumption

gasoline engines.

Here a reduction in diesel penetration from the current position is more likely,

with the emerging industry in India, China and Eastern Europe best placed to

satisfy the demand for relatively low cost gasoline powered models.


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