Why this brand is ditching diesel

Hyundai has entered a new era, with the debut of its off-road focused XRT Pro sub-brand to live alongside its already-successful N performance arm.. Despite many of Australia's off-road and towing-focused buyers considering diesel a non-negotiable, Hyundai says choosing to leave the fuel type behind won't cost it sales.. Hyundai Australia's General Manager of Product Planning Jonathan Lam said diesel was never part of the next-gen Palisade's design from the beginning, despite acknowledging diesel power made up the lion's share of the previous-generation's sales..

"I don't think this generation Palisade was ever designed with a diesel engine available," he said.. "We think that that was more due to the 2WD being available with petrol and the all-wheel drive only being available with diesel," he said.. "Now that we have all-wheel drive petrol, all-wheel drive hybrid, based on consumer sentiment I think that is working well for our market." "If you look at why customers are purchasing diesel, it's mainly about low-end torque, fuel consumption, overall cost of fuel and so forth, but we also think that we can tick a lot of those boxes with hybrids," Lam continued..

"So with hybrid available across more of the models in our range, instead of offering diesel as a powertrain or in some cases even as the default powertrain, we're aiming to switch those buyers over to hybrid.. "I'd say it's working.. Our hybrid mix is growing year after year." The brand said its latest hybrid mix had grown to a whopping 57 per cent across its line-up, meaning Hyundai Australia is already almost achieving the company's global aspiration to be 60 per cent electrified by the end of this decade..

Australia's recently-introduced New Vehicle Efficiency Standard (NVES), which introduced penalties for high-emitting engines, are one of a similar array of laws across the globe that have caused Hyundai to stop development on new diesel powertrains into the future.. Lam said the band wasn't hearing from dealers that customers were missing a diesel option.. "For cars where we've switched diesel out, we haven't seen that we're actually missing out on a big part of the market," he said..

The brand admitted there are a few unknowns for the XRT Pro, and it was yet to be seen how such a unique vehicle would be received in the market.. Lam expects roughly 10 per cent of Palisade sales to be toward the $79,900 (before on-roads) XRT Pro, which sits in the middle of the large SUV's range.. The monocoque-based XRT Pro is playing at a similar price to popular diesel ladder frame SUVs, while offering turbo petrol power and less towing capacity, with at least some off-roading capabilities thanks to lifted suspension, a more rugged bodykit, all-terrain tyres, new drive modes and an electronic rear differential lock..

While the brand boosted towing capacity for this variant specifically, it is only by 200kg, bringing the total to 2200kg, significantly short of the industry 3500kg benchmark for most large SUVs.. The upgrade, Hyundai said, was largely in the combination of the turbocharged petrol engine and eight-speed automatic transmission in place of a de-tuned turbo engine and gearbox-mounted electric motor for the rest of the Palisade range.. Yet, the towing uptake is said to be "considerably high" across the existing Palisade range, so the brand considered it important to bring it up to the "maximum we can achieve on this platform," suggesting these limitations wouldn't be helped along by the inclusion of a diesel powertrain anyway..

Hyundai's representatives also added that the carryover 3.5-litre naturally-aspirated V6, which is still an option for the Palisade in the USA, was never made available in right-hand drive format.. Hyundai's representatives explained that the brand is "certainly looking at other powertrain options for XRT Pro" in the future, although they weren't prepared to elaborate further.. A fair assumption is future XRT Pro models may use the much-touted range-extender hybrid technology, which Hyundai has globally said will be its next chapter, and will debut on an updated Santa Fe overseas imminently..

The range-extender system will also be the primary powertrain for its upcoming larger ladder-frame products.. The ladder-frame project, expected to be built in- and serve the American market primarily, will spawn various vehicles previewed by the Boulder and Crater concepts.. It will also spawn a pick-up model..

The brand said at its recent investor day the ladder-frame vehicles would account for 50 per cent of Hyundai's sales growth, cashing in on the boxy off-road trend.. As for more XRT Pro variants locally, Lam said it would be "fair to assume" the next logical step would be a properly toughed-up Santa Fe, so keep an eye out for that in the near future..