Diesels taking over the roads as times get tough

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Diesels taking over the roads as times get tough

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Sales of Korean diesel-powered passenger cars are chugging along nicely as the price of gasoline remains stubbornly high.

Local drivers usually go for diesel SUVs or minivans, but more are choosing diesel-based compacts despite the noisier rides they often produce in order to cut travel costs, local auto makers said.

According to Yonhap News Agency, diesel-based vehicles - excluding SUVs - accounted for 6.4 percent of Hyundai Motor’s total car sales in the first half, up from 0.4 percent in 2010 and 1.7 percent last year.

Sales of the diesel version of Hyundai’s Accent, a compact, made up 32.6 percent of all Accents sold in the first half, compared to just 13.3 percent in 2010 and 17.7 percent last year.

Other diesel-based models from the nation’s No. 1 automaker also clocked up solid sales, Its i30 diesel took up just 9.7 percent of the model’s sales in 2010, but this jumped to 42.1 percent last year and 48.4 percent in first half of 2012.

For its i40, more than eight in every 10 vehicles ordered last month were diesel, a share not matched since Hyundai released a diesel-powered Avante XD in 2005.

GM Korea, the nation’s third-largest car maker, has seen a similar trend. Its Cruze compact sold 10,071 vehicles in the first half, of which roughly one-quarter were equipped with diesel engines. The company said for the past years, diesels accounted for 10 to 15 percent of all Cruzes sold, but that this climbed to 25 percent this year.

“The high cost of gas is driving more customers to seek out fuel-efficient alternatives,” said Kim Byeong-soo, communication manager for GM Korea. “Recently, diesel cars have improved their noise problems, and this is breaking down negative stereotypes.”

The latest trend comes as no surprise to importers of foreign cars, for whom diesels already outsell gas-powered vehicles. Diesels made up 16.4 percent of all foreign cars sold here in 2008, 35.2 percent last year, and 49.05 percent in the first six months of this year.

The growing diversity of diesel models may also have played a role in their surging popularity. In 2008, there were just 54 models available in Korea, compared to 97 now. Of the 24 foreign car brands that operate in Korea, two-thirds sell diesels among their lineups.

German auto makers have been putting a notable emphasis on diesels.

BMW, the nation’s No. 1-selling foreign automaker, said its diesel models accounted for 72 percent of all of its first-half sales. In that period, it sold 4,466 of its 520d, which was crowned the best-selling foreign car, while its 320d ranked No. 4 among imported cars.

Volkswagen offers up even more diesel-skewed statistics. Of the 7,554 vehicles it sold from January to June, 97 percent were diesels. For Audi, the corresponding percentage moved up from same 23 percent to 52 percent in recent years due largely to robust demand for its A4 and A6 models.

Industry pundits are speculating that as foreign car makers are cashing in on this raging demand for diesels in a wider spread of car segments, domestic carmakers may release more such models to tap the market.

No local automaker has yet released mid- or large-sized sedans with diesel engines domestically. According to sources, Hyundai is now testing its Grandeur with diesel engines, while Kia is mulling introducing a diesel version of its midsize K5, similar to the model already available in Europe. GM Korea said it is considering releasing a diesel-powered Malibu in Korea at an unspecified future date.

By Joo Kyung-don [kjoo@joongang.co.kr]

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