Global Diesel Light-Vehicle Forecast

J.D. Power and Associates Reports: Annual Growth of Diesel Light-Vehicle Demand in Eastern Europe, Asia and North America Set to Surpass That of Western Europe

OXFORD: 16 January 2008 — Annual growth of diesel light-vehicle demand in Eastern Europe, Asia and North America combined is projected to surpass growth in Western Europe by the early part of the next decade, according to the J.D. Power and Associates Automotive Forecasting Global Diesel Light-Vehicle ForecastSM.

“In the short term, it will continue to be Europe—primarily Western Europe—that will provide almost one-half of the growth in demand for diesel light vehicles globally,” said Al Bedwell, senior manager at J.D. Power Automotive Forecasting. “Whilst this remains a very significant portion, it is worth bearing in mind that average growth in Europe during the past four years was 62 per cent. We are now entering a period when Europe will become less critical as a driver of growth in global diesel light-vehicle demand. In terms of absolute demand, however, Europe will still remain the most dominant region throughout the next decade.”

According to the report, by 2017, North America and Asia combined will account for 45 per cent of global annual demand for diesel light vehicles, compared with just 25 per cent in 2007. Increasingly, diesel is seen as part of the solution to issues of vehicular CO2 emissions and air quality and is no longer associated with poor performance. As a result of these factors, significant growth in most of the major light-vehicle markets can be expected in the next decade.

With the exception of Brazil, all of the world’s significant personal vehicle markets are now technically open to diesel vehicles, although some markets impose emission limits and/or fiscal and regulatory frameworks that make the sale of diesel vehicles economically unviable. The increasing tendency to connect vehicle taxation to fuel efficiency and CO2 performance is also seen as a driver of diesel vehicle demand.

Global demand for light vehicles is expected to grow from 66 million units in 2007 to 92 million by 2017. Demand for diesel-powered light-vehicles is projected to increase from 16 million to 29 million during the same period, resulting in an increase in market share from 23.6 per cent in 2007 to 31.5 per cent by 2017.

Regional Highlights
Western Europe

* Overall growth in diesel vehicle demand in Western Europe has passed its peak. Annual increases in regional diesel share will be modest between 2008 and 2010, with slight declines likely in the years that follow.

Central and Eastern Europe

* Penetration of diesel-powered vehicles among new-vehicle sales in the Central and Eastern European regions in 2007 remained mixed, varying from less than 10 per cent in Russia (although diesel demand in the Russian urban market is beginning to stir) to 50 per cent in Turkey..
* Excluding Russia and Ukraine, the region has experienced considerable growth in diesel vehicle demand in recent years, increasing from 19 per cent in 2002 to 42 per cent in 2007.

North America

* In response to strict tailpipe emissions limits, high fuel prices and a growing awareness of greenhouse gas issues among both consumers and policy makers, rising demand for both diesel cars and light trucks is forecast for the North America market.
* Many manufacturers now have firm plans to enter the U.S. diesel market, which is projected to lead to a significant rise in diesel light-vehicle penetration, from 3 per cent in 2007 to 14 per cent by 2017.

South America

* Brazil’s increasing commitment to ethanol as a fuel type for passenger vehicles will limit diesel prospects in South America’s largest vehicle market. Nevertheless, diesel light-vehicle penetration rates are climbing in other markets in the region, particularly those strongly influenced by European auto makers.

Asia

* Asia’s largest light-vehicle markets, China and Japan, have very low current levels of diesel vehicle sales. The advent of clean diesel may lead to a rise in demand in Japan. China includes diesel on its list of carbon-reducing technologies for personal transport and already has a large diesel light-vehicle market.
* Diesel penetration rates in the total Asian light-vehicle market are predicted to increase by 10 percent by 2017.

For more information regarding the J.D. Power and Associates Automotive Forecasting Global Diesel Light-Vehicle Forecast, please contact Siubhan Reid Litherland at +44 1865 207053 or Rob Simon at +1 248 267 6800.

About J.D. Power and Associates
The European headquarters of J.D. Power and Associates is located in Guildford, UK. With world headquarters in Westlake Village, California, U.S.A., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies:
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2006 were $6.3 billion. Additional information is available at http://www.mcgraw-hill.com/.

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

Source: J.D. Power and Associates

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