3/7/1992 1

Current And Future Diesel Market

Wolfgang Groth

VWoAEngineering and Environmental Office

3/7/1992 2

Volkswagen and the Diesel

• Volkswagen introduced LD Diesel engines in 1976.

• VW today is the biggest Diesel engine producer in the world.

• 2001 VW produced 5 million cars. About 1.7 million vehicles were Diesel.

• Main Diesel market is Europe.

3/7/1992 3

Diesel market share in Germany and Europe

1987 1989 1991 1993 1994 1997 20001998199619951992199019880

5

10

15

20

25

30

Sh

are

[%]

1999

3/7/1992 4

45

35

30

25

20

15

10

40

1990 92 94 9896 2000 02 04 06

Prognosis 8/1997

Prognosis 6/2001

Prognosis 5/1998

Prognosis 3/1999

Prognosis 3/2000

Prognosis 3/2001

Actual amount

European Passenger cars Diesel market share

Actual sales versus marketing projections

Source: DRI

3/7/1992 5

West European diesel marketshare New passenger car registrations,

1st and 2nd Quarter 2001

JapaneseFiatGM

FordWest Europe

Renault

BMWDC

PSAVW Group

Diesel Gasoline

Manufacturer

%

Source: ACEA, Marketing Systems

3/7/1992 6

Why are European Diesel sales high?

• High fuel prices • Engine performance benefits• Tax incentives for Diesel fuel • Voluntary fuel economy agreement of

manufacturers• CO2 reduction strategy• Achievable emission standards

3/7/1992 7

VW-Konzern

The most fuel efficient vehicles in the European market

Mercedes A16 60 PS

Opel Astra ECO 4 75 PS

Smart cdi 41 PS

2 3 4 5 6Fuel consumption in l/100 km

Diesel-PKW

VW Polo 1,9 SDI 60 PS

VW Lupo 1,7 SDI 60 PS

Seat Arosa 1,7 SDI 60 PS

VW Lupo 1,4 TDI 75 PS

Seat Arosa 1,4 TDI 75 PS

Seat Arosa 1,2 TDI 61 PS

Audi A2 1,2 TDI 61 PS

VW 3,0l Lupo 61 PS

VW Polo 1,4 75 PS

Audi A2 1,4 75 PS

Competitors

3/7/1992 8

LD Diesel market in the US

• Currently Volkswagen is the only manufacturer offering LD Diesel vehicles in the US– Golf TDI– Jetta TDI– New Beetle TDI

• About 7% of our total sales are Diesel• In Canada we sell about 30% Diesel

3/7/1992 9

Volkswagen US- Diesel Vehicle Sales 1996 - 2002

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1996 1997 1998 1999 2000 2001 2002

3/7/1992 10

Marketing obstacles in the US

• Diesel image– Noisy– Smelly– Visible smoke

• Fuel prices much lower than in Europe• Diesel concept cost higher than gasoline

3/7/1992 11

Positive US Marketing aspects

• Future Diesels will be very clean– No visible smoke – Smell largely reduced– Cold start noise strongly reduced

• Performance superior to gasoline• Fuel economy 40-50% better than

conventional gasoline engine

3/7/1992 12

High pressure injection systems

Common-RailSystem

Unit-InjectorDistributor InjectionPump

3/7/1992 13

VW exhaust aftertreatment systemsVW particle filter system and NOx storage catalytic converter

NOx sensor

NOxstorage

cat.

Oxi-cat.

p sensorTemperature

Particle

filter

NO2

cKat.

EDC

sensor

3/7/1992 14

Volkswagen strongly believes that the Diesel will have a future

role in the US.

To achieve this the vehicle will meet the following criteria

3/7/1992 15