Diesel revival: hope or curse?
Since April of this year the decline in diesel sales in Belgium has stopped, in fact there is a slight revival. Is this a lasting trend change and if so, should we be happy with it?
While in the middle of 2017 there were still as much diesel cars sold as petrol ones in Belgium, the part of the diesel declined from 48% in August 2017 to 34% in April 2018, while the share of petrol cars rose above 60%. But since this low the market share of diesel is slightly increasing again.
The market share in August of this year for diesel rose to 36,7%, petrol cars share declined accordingly because the share of so-called alternative propulsion (gas, electricity) stagnates around 5% on the Belgian market.
Most car manufacturers observe highly interested how the diesel is doing. Premium brands like Audi, BMW or Mercedes but also Jaguar Land Rover and Volvo sell many diesel cars on the Belgian market, also because the engine type is still very popular in the important fleet market which reacts more conservatively to market changes.
The important question is if this reverse tendency is temporary or not? Are people coming back to diesels because they are still consuming less than petrol cars? Alternative fuels are even cheaper, but people don’t know this or the price of the vehicle itself is still too high and the choice on the market too small (especially true for electric vehicles).
More important is the increasing amount of cities that have the intention to chase diesel cars (or simply all cars with an internal combustion engine) from their city centres in the future. That creates uncertainty with consumers, especially about the resale value.
Many importers and dealers were also fearing that they would sit on an increasing stock of diesel vehicles, so the rebates on diesels were never higher while the waiting times for petrol cars were getting longer and longer.
The diesel decline is not specific to Belgium. In the whole European Union (including Norway and Switzerland) the diesel market share for the first half of this year still declined to 36,8%, almost 10% less than a year ago.
Ferdinand Dudenhöffer of the Centre for Automotive Research at the Duisburg University in Germany predicts that the fall of diesel cars will continue. Manufacturers have reacted to sales regress by reducing production volumes and scrapping diesel models or variants. “This is no one-off decrease but a structural problem”, Dudenhöffer claims. “There are no indications that this decline will halt.”
Also because comprehensive environmental measures have to be taken for diesel engines, they will get more expensive, while on the other hand alternative propulsion will become cheaper, turning around the cost balance.
This creates some huge problems for European manufacturers on the environmental or emission rulings side. In 2021 the average CO2 emission of the car fleet will be limited to 95 g/km. Due to the popularity of SUVs (consuming more than the normal hatchback from which they are derived) and the decline of the lesser consuming diesels this limit will be very hard to reach.
Especially with the new WLTP emission calculation method, where all cars are consuming more than before, the targets will even become more difficult to attain, and if car manufacturers don’t meet the fixed limits, they will have to pay huge fines, going into billions of euros.
Dudenhöffer’s conclusion sounds harsh but also realistic: “The European car manufacturers have a gigantic problem in the only remaining diesel island in the world, Europe.”Belgische dieselverkoop krabbelt weer overeind