Diesel spike tipped

The boom has been tipped after recent amendments to the luxury car tax and the introduction of new diesel fuels.

The luxury car tax now has a fuel efficient car limit for cars that consume no more than seven litres of fuel per 100km. These green cars would not attract any luxury tax until a new higher threshold of $75,000.

It is expected that the new tax threshold will encourage premium manufacturers, including Mercedes Benz and Audi, to rollout more newdiesel models, especially SUVs.

Diesel vehicle sales in Australia have increased by 34 per cent since 2003.

Private diesel passenger sales this year have risen 28.4 per cent to 16,376, while non-private passenger diesels are up 86.8 per cent to 12,250.

SUV private diesel sales are up 24 per cent to 19,670 and non-private up 40 per cent to 24,780.

Sales might have been even higher except that many of the modern frugal diesel engines are not suitable in Australia because our diesel fuel's sulphur content, until recently, could be up to an unacceptable 500 parts per million.

By next year it has to be no more than 10parts per million, which is the standard to which BP Ultimate is produced.

Oil companies are now starting to supply diesel fuel with the lower sulphur content and claimed improvements in performance and economy. Shell is already selling diesel restricted to less than 10 parts per million of sulphur and other suppliers will have to conform to that standard next year.

BP Australia is also releasing BP Ultimate diesel after a successful trial of the fuel in Perth.

The new diesel contains anti-foaming agents to stop frothing and smells when filling up. It also has less sulphur, allowing us to use the latest generation of European diesel engines.

The BP Ultimate fuel was independently tested, with results showing better economy and fewer pollutants when compared with ordinary BP diesel. It was shown that with ongoing use, Ultimate diesel increased the power output of a passenger car by up to 8.3 per cent (average 2.8 per cent) compared with ordinary diesel.

BMW Group Australia managing director Guenther Seemann says tax changes and the lower sulphur content will mean continued high sales of diesels and more diesel models being offered.

He says they are now seriously considering bringing in the six-cylinder BMW 330d, with 180kW of power and 520Nm of torque, yet consuming only 6.8L/100km.

So far this year 4055 BMW customers opted for a diesel, representing a 65 per cent increase over the same period last year. The proportion of diesel buyers has also grown from 19.6 per cent to 30.6 per cent of all BMW sales.

BMW offers nine diesel models in Australia: 1 Series Hatch; 3 Series Sedan; 5 Series Sedan; X3 Sports Activity Vehicle; X5 Sports Activity Vehicle and X6 Sports Activity Coupe.

Mercedes-Benz Australia president and CEO, Wolfgang Schrempp, says he expects the upward trend for diesel car sales to grow.

Currently about 23 per cent of all Mercedes-Benz cars sold here are diesel and the figure is even greater for the Mercedes-Benz M-class off-roader. “The interest in diesel is not diminishing,” he says.

“It's a question of the torque available in these cars. It's changing perceptions.”

And Audi Australia have already said they will try to turn a provision in the increased luxury car tax to their advantage when they revamp their A6sedan and wagon range next year. Audi Australia managing director Joerg Hoffmann says they can use the “green” provision in the luxury car tax by having smaller diesel engines than offered in theA6 range: the 2.0 TDI and 2.7 TDI V6.

Efficient cars, such as the A4 and A5, with the 3.0 TDI V6, are liable for the LCT only on the cost of the vehicle above $75,000.

Volvo has announced that diesel fuel will continue to power its cars into the next decade despite it also having plans for more efficient petrol engines and even hybrids.