Diesel just doesn't add up...or does it?

So today I was driving around, aimlessly crunching numbers in my head as I so often do on a Thursday.

And an odd set of figures jumped into my head. If Europeans can get 63 Miles per Gallon in their cars using diesel, then why are we stuck with gasoline powered cars that only get 30 miles per gallon?

I mean its practically part of our Bill of Rights as Americans to get twice as much for half the price, right? How can we, as good upstanding citizens, pass up a 2 for 1 deal?

When I got home, I jumped on the Internet to fact check some of these numbers.

*** Warning: Math! ***

First of all, 63 mpg is actually Imperial Miles per Gallon, and not the same MPG that we use here in the US. In Us gallons, that works out to about 52 mpg

Ok, well that's still better than 30 mpg!

Now this is where it gets interesting. The make and model of the car plays a huge factor in the mpg rating. For example, the new US Ford Fiesta with Super Fuel Economy package gets 40 mpg. The new engine technology is amazing, and it boosts fuel economy to an industry leading 40 mpg among sub compacts.

It's hard to make an apple to apples comparison, but lets take a look at the VW Golf. The diesel version starts at $23,000. The base level Golf starts at $17,000. Which works out to about a $6,000 premium for the diesel engine. I've talked to several engineers and they all tell me that adding a diesel engine to a car is a $5,000 upgrade. That's pretty close to our real world scenario with VW.

Now if Ford was to offer the same Diesel that I looked up on this Fiesta in the UK, and we guesstimate that it would add $5000 to the price, the questions is: Does Diesel make sense?

Let's run the numbers
A US model Fiesta with the SFE package starts at about $17,000. If we presume that a Diesel model adds $5,000, that would make the vehicle $22,000. A thousand less than the VW Golf TDi. So why isn't Ford offering it?

According to the Federal Highway Association, the average person drives 15,000 miles per year. The Fiesta has a fuel capacity of 12 gallons, and can go 480 miles on one tank. That means 32 tanks of gas per year. Gas is about $3 per gallon, so that would run you $1,152 in fuel costs per year.

Now, if you go with the hypothetical diesel, you would get 52 mpg and could go 624 miles on one tank. That works out to 24 fill ups for the year, which at $3/gal for diesel means $864 per year in fuel costs.

Hmmm it's starting to look bad for Diesel. That's only $288 a year in savings. If the diesel model costs $5000 more, it would take you 17 years before you were saving money.

Seventeen years.

Even if you drive twice as much as the average at 30,000 miles per year, it will still take 8 years to break even.

To make matters worse, that diesel has 89 horsepower. No wonder Jeremy Clarkson called it a dirty word. So I don't know about you, but I'd rather keep the five grand and have 30 more horsepower!

For all the hoopla that surrounds diesels, it just doesn't add up for the US market. I don't hate diesel, I just don't think it's the right technology for this size car. Diesel has proven itself in the commercial truck market, but until the engineers figure out how to deliver higher MPG at comparable cost to gas, I'm sticking with what's proven in small cars. If you think I'm wrong, or maybe I missed something in my calculations, let me know in the comments below.

Here's some articles from around the web on the subject:
The 65 mpg Ford the U.S. Can't Have
Ford’s ECOnetic Fiesta Gets 65 MPG. You Can’t Have One.

Notice the titles? I wonder if people are just reading the headline, and not the full article. Give me a diesel they say. I want 65 mpg, they say. But even the articles don't mention the fact that it is Imperial MPG, not US MPG. They also completely ignore the fact that the legislation is different and the UK assigns a tarriff based on how much C02 is emitted by the vehicle, plus a congestion tax. It's mind boggling, and it makes for a completely different set of rules for the car manufacturers to meet.

So for all of you clamoring for a Diesel, what makes it so attractive?

Love Lost

Recently @ScottMonty from Ford posted on his Twitter account:

Hey @FordFiesta agents, what do you think of this? http://bit.ly/6YatjE #fiestamovement cc @samdelag

The article basically says America no longer loves cars. I thought I loved cars. Then I drove a Ford Fiesta for 6 months, it completely changed my mind on what to expect from an inexpensive car. I should disclose Ford loaned it to me for free, paid for the gas and insurance, but most people already know that.

Here's my rambling reply to the article:

I think there are several issues at work here

First of all, what defines love? For some people it's the styling, for others it's the freedom that the car allows, and for others it's the utility. Look at Jeep...people love those things, because it represents the freedom of off roading and go anywhere ruggedness.

I completely agree with you that someone who just sees their car as a commuter box is NOT in love with their car.

Sadly, most Americans have been lulled into complancy by watered down cars. But I don't think that Americans have lost their love affair with cars, I think car companies have lost their passion.

As car companies strive to be the most reliable, they lose sight of design and creativity. Instead, the cars get analyzed, studied by focus groups, and assailed by engineers and accountants. Look at the most reliable brands sold in the US: Honda and Toyota. I can honestly say I have never done a double take of any (factory/default) vehicle sold by either of those brands. I bought a Honda Element because it was reliable, and it allowed me freedom to load up just about anything, tow my light boat, let the dog jump up on the seats, etc etc. I did not buy the Element b/c of how it looked. I loved the E for it's ability to let me go camping, boating, and enjoy the outdoors. I came to appreciate it's boxy looks, but in a "you can't tell a family member they're not good looking" kind of way. I loved it so much that I made a farewell video for it when I sold it.

I think the challenge car manufactures face is making extraordinary cars for normal people. Their is no shortage of extraordinary cars for people with lots of money, or people who are passionate about cars (Mustang, GT-R, Camero, etc).

Here's what needs to happen. Detroit needs to get the attention of their customers. Court them, if you will. Get the customer to notice them. Find out what the customer wants. Then deliver it in a customizable, affordable, reliable package. And when I say "customizable" I don't mean your choice of Tan leather or Beige cloth seats. Maybe offer LED lighting, or an App store for the in dash computer. Throw in a season of Top Gear on DVD, and let Clarkson and his gang do the educating.

In many cases people don't even know want they want in a car. All they know is how much it should cost, and quite frankly, that is the worst way to make any buying decision. In this case, Detroit needs to tell people what they want. Come up with new ways to get people to put their butt into a vehicle and try it. Have the sales guy stop talking about the financing and the weather. Maybe offer a driving class with the purchase of a vehicle, even if it's not a performance car.

Look at how Apple sells computers. They find out what you're into. Photos? Then they talk about iPhoto and how it can geotag and do facial recognition. Like to go online and facebook? Then they talk about fewer viruses and the speed of the Safari browser. See a pattern?

They're not talking about the computer, they're talking about furthering your passion.

Another part of the problem is the fact the most people finance their cars. They look at it from the perspective that the car only needs to last 3-5 years, or the term of their lease or whatever. Every 3-5 years they switch cars. Go to the dealership. Fill out stacks of paperwork. After doing this for 10 years, they're exhausted. They don't want to go back to the dealership. They just want a car, to put them out of their misery.

Imagine if you had to buy a dishwasher every 3 years. You would be so tired of going to Home Depot, you'd just say hey give me the new model and lets be done with it.

The longer I've owned a vehicle, the more I've grown to love it. As I have more experiences with the car (road trips, seeing old friends, going new places), it takes hold. As long as the car is reliable, it's a recipe for success. When I start to get a little tired of the car, and it needs a freshening, hey I put better rims or tires on the car. Next up, what about a remote starter? At 75,000 miles? time for a stereo upgrade.

Here's an idea: offer periodical upgrades to the car as part of the purchase price. For free. It could be hardware (fog lights, new floor mats) or maybe even a software upgrade (helllooooo app store can you hear me? Do you realize people PAY to upgrade their Navigation systems?)

What's more expensive? To keep the current customer or get a new one? So why don't car companies try to keep people in the same car, longer? Yes I know they need to sell cars every month, but maybe they could become more profitable by adding long term value to the cars. In other words, sell fewer cars, but sell more add-ons. In turn, take the profits and build more creative and reliable cars. Invest in the cars, AND the customers. Give out freebies. Become awesome.

I agree with you that for the past 10 years or so Detroit has sucked at selling cars. Oh look another car commercial with some winding roads and a car and the announcer saying "just sign and drive terms and leasing $499 mumble mumble mumble".

I disagree that people have lost their love of cars, and I just think that their love is dormant.

Let the awakening begin!