Diesel is definitely a niche market for passenger cars. Other companies won't even think about retooling their lines for diesel until they know they can easily sell high volumes. The Euro car makers can do this at almost no cost whatsoever right now. Even though demand is high for TDIs, when you look at total sales compared to say Accords/Camry's, it is definitely niche.
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Before the rise of semi trucks being the primarily method of shipment I'd say no. With the amount of filling stations now available diesel could easily take off. The infrastructure is there.
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