NSANY Nissan Motor Company Ltd (PK)

Sales of diesel-powered passenger cars have dried up in the U.S. following the disclosure of Volkswagen AG's diesel-emissions cheating scandal, with auto makers selling less than 250 such models in January.

The German auto maker began halting American sales of popular diesel-powered cars in September after the Environmental Protection Agency said that it used defeat devices to cheat on diesel emissions. Diesel passenger cars had typically represented between about 5,000 and 10,000 monthly sales through the first eight months of 2015, according to WardsAuto.com.

Diesel has long been advertised as a more efficient alternative to gasoline, and a broad range of auto-parts makers—including major U.S. suppliers— have invested heavily to meet demand in Europe for diesels and to try boosting American interest. The outlook for the technology was bleak following initial news of the Volkswagen scheme and five months of sales data darkens that view.

Auto makers sold 3,500 diesel cars in September, and that number fell below 1,000 during each of the final three months. The lack of supply hampered sales, but low gasoline prices and a blow to diesel's reputation also played a role.

The 222 units sold in January was a sharp decline from the 4,448 sold in the same period a year ago, representing a drop of about 9.25 diesel cars sold a day in January versus 171 a day in the same month in 2015. The January sales were a little more than a third of the 631 sold in December. Diesel car sales for 2015 peaked in May, when 9,300 were sold.

Mostly seen as a preferred technology for work-related pickup trucks or vans in the U.S., diesel wasn't widely embraced as an alternative to gasoline for passenger cars. WardsAuto.com reports strong demand for diesel in light trucks through the crisis, reflecting a wider migration among buyers to heavier vehicles.

Volkswagen has been one of the biggest advocates of diesel technology for sedans, coupes and compact cars, representing about 80% of the diesel passenger car volume. German rivals BMW AG and Daimler AG's Mercedes-Benz unit continue to offer diesel cars, but the extremely small number of diesel car sales reported in January shows Volkswagen's influence on that market.

General Motors Co. offered a diesel-powered Chevrolet Cruze compact car in the U.S., but recently took it off the market for a new version that debuts later in 2016. GM also offers diesel versions of light trucks, as do its competitors. A spokeswoman for the car maker said it hasn't sold a diesel Cruze since May 2015.

The decline in diesel volumes was somewhat offset by truck demand until January, when volumes of both cars and trucks with diesel engines fell. Auto makers sold 21,999 diesel light-trucks in January, a 16% decline compared with the same month in 2005.

Patrick Min, senior analyst for automotive Internet shopping site TrueCar Inc., said light trucks will remain the likely destination for diesel engines in the U.S.

There are a "growing number of light-duty trucks offering diesel," he said, including Nissan Motor Co. and additional GM models.

Mr. Min said low gas prices also "temper demand for diesel passenger cars…diesel can be a 20% to 25% premium at the pump."

Write to Jeff Bennett at jeff.bennett@wsj.com

(END) Dow Jones Newswires

February 18, 2016 15:35 ET (20:35 GMT)

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