I have always assumed the manufacturing costs of a diesel engine are higher than for a petrol engine; but wondered by how much.
Looking at the current UK price list of some cars the discrepancy between prices for their diesel and petrol models, with the same specification, is quite marked.
On some expensive cars, the Mercedes E320 and Alfa GT for instance, the diesel version is cheaper.
Yet on the new Fiesta Zetec S the 90bhp diesel is £900 more than the 100bhp petrol version. The 99bhp versions of the Focus have the diesel a whopping £1,700 more. Peugeot 307 are in the same league as the 90bhp diesel is £1,600 more than the 90bhp petrol version(with the same trim)
Whilst 'dieselheads' will extol the driving characteristics of compression ignition machines, most people buy them for their superior economy.
I accept, that even with a £1,700 differential, over many many miles that sum can be recovered. However that isn't the point; surely these huge price differentials cannot be justified.
A cynical marketing exercise?
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> A cynical marketing exercise?
No, free market economics.
Charge what the market will stand.
Some years ago, whilst visiting the Ford plant at Dagenham, I was given an idea of the development and production cost differential between a Fiesta 950 Pop (not even a Pop 'Plus'), and a Granny 2.8 Ghia X. It was not even close to retail difference in the many thousands of pounds. The Ford guy I was with explained how in fact making a relative few Grannys kept the price of the humble Fiesta below what it would otherwise have been.
Back to engine based pricing, I know that Ford once marketed 1.6, 1.8, and 2.0 Cortinas for the same price, but usually, if you increase the capacity of the same basic engine, you get charged more, too. Daft in simple terms, but not when you consider that a company exists to make a profit.
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> 1.6, 1.8, and 2.0 Cortinas
Cortinas=Sierras.
Sorry.
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Of course such marketing move makes more sense on the continent where diesel fuel is much, much cheaper (in some countries, such as Holland for example it's massive 35% difference in price). Higher car cost but better economy, lower fuel price, lower servicing costs, better durability of the engine. It makes perfect sense.
UK, however represents tiny number of countries in the world where diesel fuel costs more than petrol. Considering that most of our public transport, goods shipment and transit depends on diesel, charging more at pump is the most "cynical marketing excercise" of them all...
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Most of the big fleet brands (Ford, Vauxhall, Peugeot etc) charge more for their diesel equivalents due to the company car market. Basically, ever since company car tax went CO2 based, diesel power represents your only choice if you want a reasonable sized car with anything resembling performance, and you don't want to hand over a sizeable chunk of your hard earned to Gordon Brown every month.
Company car tax favours diesel massively, and if your chosen car's engine meets the new Euro 4 emissions regs, you pay next to nothing % wise. You've got to admire our Chancellor's cunning though - he's rigged the tax rules so all the fleets go diesel, and now got all these company motors running around clocking up mega mileage on the highest taxed fuel on British forecourts.
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Of course such marketing move makes more sense on the continent where diesel fuel is much, much cheaper (in some countries, such as Holland for example it's massive 35% difference in price). Higher car cost but better economy, lower fuel price, lower servicing costs, better durability of the engine. It makes perfect sense. UK, however represents tiny number of countries in the world where diesel fuel costs more than petrol. Considering that most of our public transport, goods shipment and transit depends on diesel, charging more at pump is the most "cynical marketing excercise" of them all...
Any price advantage diesel enjoys is largely determined by the Tax rate applied to it in various countries. As for "tiny number of countries". Agreed many countries have lower tax rates for diesel than petrol, although not in the largest car market in the world - the USA - where Federal tax on diesel is 30+% higher(State tax varies but is broadly similar). Hence diesel is considerably more expensive at the pumps - albeit still cheap.
The Exchequer needs to raise £X billion from taxation and Fuel tax is just a means of raising revenue and it has nothing more to do with motoring than, say, tobacco tax. So I fail to see what is cynical about the Chancellor pitching his tax rates so diesel is roughly comparable to petrol at the pumps; and the tax is only slightly more anyway. There surely cannot be any reason why diesel for private cars should be cheaper than petrol.
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I thought that diesel engines with their higher compression ratio and their high pressure ancilliaries are actually more expensive to manufacture than petrol engines?
El Dingo.
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I thought that diesel engines with their higher compression ratio and their high pressure ancilliaries are actually more expensive to manufacture than petrol engines?
Surely not £1900 more expensive?
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>>Surely not £1900 more expensive?
No, I suppose not. Some diesels are actually cheaper than their petrol equivalents.
I don't suppose that a Jag X-type 2 litre costs any more to make than a Mondeo 2 litre accounting for trim/styling costs and local labour.
El Dingo.
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>>Surely not £1900 more expensive?
Remember most diesels have sophistcated vairaible vane turbo's etc, most petrols do not. Comparing like for like would be, for instance comparing a Passat 1.9 TDI with a 1.8T.
I don't suppose that a Jag X-type 2 litre costs any more to make than a Mondeo 2 litre accounting for trim/styling costs and local labour.
The Jag has a V6, the Mondeo a 4 cyl, the V6 will cost more to build.
The X-Type is a great marketing exercise by Ford, it is based on the Mondeo, probably costs 10% more to build (i.e. 2.0 d's) though sells for 20% more at street prices.
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The one that has always made me wonder is, for instance 1.8 an 2.0 petrol engines in otherwise the same spec car. Often the engine is exactly the same though with a bigger bore and/or a longer stroke. It really cannot cost significantly more to make the 2.0 on this basis however it will sell for perhaps a grand more. I guess it is simply means that the 2.0 is more profitable than the 1.8, accordingly I wonder if discounts are more readily avialable on, for instance, a 2.0 Mondeo LX, than a 1.8.
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I've also wondered whether it really cost much (any?) more to build a 2.0 engine than a 1.8 or a 1.6 or whatever. If it doesn't, then one must assume that the larger engined car, sold for say £1000 more, must simply be about £990 more profitable. In which case, why sell the smaller engined ones at all?
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An earlier post referred to supply and demand - that's what it's all about.
Most companies (not just in the motor industry) don't price on a cost+profit basis for each and every product. In very simple terms, they want to get the right level of TOTAL return on their capital. Hence profit margins on different products will vary depending in large part on how price-sensitive sales volume is.
An example - the sales volume of medium-large Citroens is very price sensitive so prices (actual rather than list) are low. The sales volume of comparably sized BMWs is not that price sensitive (because demand is higher) so BMW can charge more.
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UK - BMW 120i = £18,320 120d = £18,850
Spain 120i = 28,600 euros 120d = 28,600 euros
Diesel fuel approx. 80% of petrol price here. As noted above marketing sets prices, not costs
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