Paris, France - Sales of diesel-powered vehicles may be peaking in Europe as stringent emissions laws push up prices but auto industry executives say their popularity will increase in other parts of the world.
GM Europe powertrain operations vice-president Roger Johansson said: "We see sales flattening out (in Europe), mainly driven by cost and cost of meeting new emissions standards."
Diesel engines now power half of Europe's new cars, up from about 32 percent in 2000. The vehicles cost about €2000 (R19 600) more than petrol-powered cars, but typically get 30 percent better fuel consumption.
But the price of the cars and the cost of producing them have been rising in Europe as automakers have to invest in advanced technology to meet stricter emissions standards.
Mazda sales and marketing chief Dan Morris said the fuel efficiency of diesel engines should increase the popularity of the vehicles in other markets.
He said: "I think diesels have room to grow globally.
Global demand for diesel light vehicles is expected to nearly double over the next 10 years, increasing from 15 million sales in 2005 to 29 million in 2015, according to a recent JD Power survey.
It said the share of diesel vehicles in western Europe is expected to peak at below 60 percent of the new vehicle market.
The report said: "South Korea and India are key markets for diesel growth in Asia and the market in China is continuously developing."
Global carmakers are also eyeing the United States, the world's largest vehicle market, for their diesel offerings.
Honda recently developed a new and simple diesel powertrain that is as clean as petrol-fuelled cars, and plans to release it for the US market by 2009 and later to other regions.
DaimlerChrysler and Volkswagen are also preparing next-generation diesel cars for 2008 US launch.
Mercedes sales and marketing chief Klaus Maier, said the group could meet or surpass the 15 percent market share that diesel was expected to have in the US premium segment by 2015. - Reuters