Land Rover leads robust UK premium diesel sales

The UK's best-selling diesel model by far is the Land Rover Defender

Figures buck trend of overall diesel market, with sales falling 11% as volume manufacturers look to electric power

More than half of diesel car sales in the UK are coming from premium brands, led by Land Rover, as volume brands continue to trim diesels in favour of electrification.

The four biggest premium brands – Audi, BMW, Land Rover and Mercedes-Benz – accounted for 56% of diesel car sales in the first half of 2023 in the UK, amid a continued decline in popularity of the fuel.

SMMT figures reveal that diesel sales fell 11% to 86,469 in the UK to the end of July, giving the fuel a record low 7.9% share. That includes both pure diesels and those with mild-hybrid electrification.

The diesel share has now fallen to half that of electric cars, which grew 38% to capture 16% of the market.

However, diesel sales at the higher end of the market remain fairly robust, with premium models accounting for four of the five best-selling diesel cars.

The best-selling diesel model by far was the Land Rover Defender, with 6049 sales, ahead of the Audi Q5, Range Rover Sport, Volkswagen Tiguan and Land Rover Discovery. 

Diesels' share of Land Rover sales for the year stood at 56%, compared with 7.9% for car makers on average, illustrating the continued popularity of the fuel among customers of larger SUVs looking for fuel efficiency.

Such is the continuing popularity of diesel among Land Rover customers that the brand has made a fifth of all UK diesel sales so far this year.

Jaguar’s share of diesel across its total sales was also far above average, at 41%.

The figure declines, however, among German premium brands. Audi was the UK’s second biggest-selling diesel maker from January to July, but diesels' share of its sales was much lower, at 14%.

“For many drivers, the latest diesel cars still remain the most efficient option – particularly for those based in rural areas, those covering high miles or those with towing requirements,” SMMT CEO Mike Hawes told Autocar.

The picture is similar in the European Union in terms of diesels' waning popularity. They were overtaken by EVs for the first time in June, according to ACEA figures. Diesel share fell from 17% for the month last year to 13%. Meanwhile, EVs grew to take a 15% share.

The picture across the EU is less skewed toward premium brands, with the Skoda Octavia the best-selling diesel in the first seven months, followed by the Tiguan and Volkswagen Passat.

However, in Germany, diesel premium sales are still strong. In the first half of the year, for example, Mercedes sold as many diesels as petrols in the country, according to the KBA. 

Premium demand keeps diesel sales relatively high in Germany compared with the rest of Europe, at 26% of all cars, according to the KBA.

BMW’s diesel mix over the period was 38% and Audi’s was 37%, according to KBA data seen by industry analyst Matthias Schmidt.

Customers, particularly fleets, are likely gorging on good lease deals offered by the car makers as they look to recoup investments, Schmidt believes.

“German premiums in particular are more exposed to larger cars and had bet their garden shed on diesel for the opening half of this decade in their long-term planning rounds, leading to sunken costs in this technology,” he said.

Diesel’s continued popularity among buyers of larger SUVs however is being eroded, both by electric and plug-in hybrid alternatives.

PHEV sales fell 11% last year in the UK amid supply-chain shortages, with some predicting that demand for this stopgap technology was drying up. However, sales rose 28% to 73,857 through July to close on those of diesel, according to the SMMT. PHEV sales in July itself jumped 79%.

Premium brands are partly driving this change. Land Rover was the leading PHEV seller through July in the UK, ahead of BMW and Volvo.

PHEVs are more attractive to corporate buyers because they offer far more generous company-car tax incentives than diesels, particularly for new-generation models with bigger batteries.

From the point of view of a private buyer, PHEVs are also much better futureproofed against tightening rules on what’s allowed for free inside city low-emissions zones. 

EVs are also becoming more appealing for drivers of larger premium vehicles as charging speeds improve and the charging network slowly grows.

For some buyers of premium cars, however, the fuel economy and ease of use of diesel will remain unbeatable for some years to come.