The fuel debate: Should you stock more diesel or petrol cars? - NextGear Capital UK
The fuel debate: Should you stock more diesel or petrol cars?
For car dealerships, the key to success is simple: sell what buyers want. Dealers need to stay on top of industry trends and consumer behaviour to guarantee that their showrooms and forecourts are stocked with the right types of car.
So, what about diesel and petrol cars? In which direction is consumer demand heading? A recent whitepaper from cap hpi, titled ‘Petrol versus Diesel,’ shares some valuable insight.
The ‘gradual decline’ of diesel cars
The introduction of the report explains how diesel cars were once deemed the obvious choice for drivers. They were thought to offer more economical running costs paired with lower CO2 emissions; however, in recent years, their benefits have been challenged.
Cap hpi outlines the three main factors that could undermine diesel car demand in the coming years. These include environmental issues, where diesel’s beneficial impact on emissions is not matched by other pollutants; increasing efficiency of petrol engines; and the growing popularity of Alternative Fuel Vehicles (AFVs).
Though diesel cars may fall from favour in the future, it certainly doesn’t mean that you should rid your forecourt of them altogether. As cap hpi notes, diesel cars are still extremely popular, particularly within the business and fleet sectors.
Cap hpi explains how consumers are becoming increasingly aware of total cost of ownership (TCO); and it’s here where diesel cars are considered to be more appealing than their petrol counterparts. Diesel cars are thought to be lower-cost as they are more fuel efficient; and for the majority of drivers, refuelling their car is the moment when the TCO is most obvious.
Many consumers believe that the premium charged for diesel cars will be offset by cheaper fuel bills, together with higher residual values.
Surveying dealers for the report, cap hpi uncovered that 85% were fully aware of the current fuel debate and issues linked with diesel vehicles. At the same time, over three-quarters (78%) showed their support of diesel cars, stating that they would not be making snap investments in AFVs or electric vehicles (EVs) anytime soon.
In the survey, just 18% of UK car dealers said they would consider investing into AFVs/EVs, suggesting that dealers remain “overwhelming supportive” of diesel cars, said Philip Nothard, consumer and retail editor at cap hpi. He added that dealers “are not deterred by negativity in the media surrounding the perceived issues.”
Cap hpi concludes by predicting a gradual shift away from diesel over the coming years, with growth in petrol cars hybrids and EVs compensating for the decline. But for now, there is nothing to suggest that buyers will shun purchasing diesel cars.