Demand for diesel engines is surging among car buyers in Europe and will continue to rise, helped by the engines improved performance and fuel economy, two studies say. Volkswagen AG and PSA Peugeot Citroen SA are the biggest producers of the engines, though other carmakers are scrambling to increase output. Diesel car sales in Western Europe rose by nearly a third in the past five years, to 3.55 million vehicles last year, or 2.5 percent of all cars sold.