Tuesday, September 9, 2008

Anti-Diesel Bias

Ford has a new model ready to hit showrooms in November that under normal circumstances would have Toyota worried. The 2009 Fiesta ECOnetic is a 5 passenger compact car that looks a lot like the previous generation Focus and will get 65MPG, with only one stipulation. You will have to be in Europe to buy one.

Why Europe only? Besides the higher cost associated with the engines being built in Britain, Ford doesn't think diesel powered cars can sell in the US.
Yet while half of all cars sold in Europe last year ran on diesel, the U.S. market remains relatively unfriendly to the fuel. Taxes aimed at commercial trucks mean diesel costs anywhere from 40 cents to $1 more per gallon than gasoline. Add to this the success of the Toyota Prius, and you can see why only 3% of cars in the U.S. use diesel. "Americans see hybrids as the darling," says Global Insight auto analyst Philip Gott, "and diesel as old-tech."

Is Ford making another miscalculation? Even with higher diesel costs, 65MPG seems an awful big selling point to me but with a government funded bailout a distinct possibility, maybe Ford feels they can afford to hold off.

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