VW diesel TDI
Michael Taylor31 Oct 2017
NEWS

VW not concerned about crumbling diesel sales

But plummeting diesel vehicle sales will have a big effect on the company that started their collapse

Sales of diesel vehicles are collapsing across Europe and electric cars aren’t picking up the slack because petrol power is on the rise again.

Cities from Paris to London to Stuttgart are openly moving to ban diesel and behind it all is the lingering taint of Volkswagen’s Dieselgate scandal and the host of immoral emissions testing loopholes uncovered in its wake.

From almost 50 per cent of the market in late 2015, the penetration of diesel vehicle sales in Germany has fallen to a third -- a stunning fall from grace for a fuel once praised for low CO2 emissions and boosted by government tax incentives across Europe.

But the company that triggered diesel’s collapse isn’t remotely concerned by the way the fuel is now being shunned by buyers.

“In 1993 the share was 15 per cent. That was OK then, as well. I’m not bothered by diesel share. It’s no problem for us,” insisted the Volkswagen brand’s CEO, Dr Herbert Diess.

Tighter European regulations for NOx emissions (the ones it cheated for a decade) pushed Volkswagen to lock in plans a long time ago for a world with fewer diesel cars.

According to Dr Diess, diesel will remain at the forefront for larger and high-mileage cars and SUVs, while Golf-sized cars will pull their CO2 emissions down by moving to 48-volt mild-hybrid technology attached to petrol engines.

“The real-world driving test (RDE) will change and become more demanding every year. Things will change, because diesel engines are becoming more expensive,” he admitted.

“The shift in that segment from diesel to gasoline won’t be a problem. In the higher segments that just won’t happen because for people driving 30,000km or more a year, diesel still is the best offer. Even if you have to pay 2000 more for the after-treatment and emissions systems, diesel will remain there.

“If the rules and applications are applied to everyone and you don’t change the competitor competitiveness, the question is always in our industry are we fast enough, do we have enough capacity to do all the applications?

“That will be challenging in the next years, because we have to basically do new homologations every year because the legislation is becoming tighter and tighter, but it can be done. Diesel engines are becoming more expensive but the technology is there.”

The difficulty with all of this is that mid-1990s European governments pushed hard for diesel-powered cars to pull down CO2 emissions to meet their Kyoto Agreement greenhouse-gas obligations.

Diesel power has an inescapably obvious NOx problem, but a switch to petrol power won’t help with the ever-tightening CO2 limits.

“We calculated an aggressive strategy that would mean we would be coming with very efficient gasoline engines with mild hybrid and 48 volts, combined with an automatic gearbox, which has the same CO2 sticker as a manual diesel. At the same price level,” said Dr Diess.

“If you really consider for us an aggressive change scenario out of diesel into gasoline, it would add only another two and a half grams to our brand target, which is in the window. The 2.5 grams increase can be compensated for elsewhere (electric cars).

“That’s for a very aggressive model. Further than what we’ve seen so far. By 2025, we have stress tested it. Also by 2020.

“Our main segment is Golf-sized cars and small SUVs. This calculation might look different for a premium manufacturer.”

While Volkswagen has rightfully been pilloried for its emissions-cheating software, Dr Diess refused to be drawn into criticism of the side of the transport business that actually does the greatest environmental harm – international shipping.

“We are acquainted with being dealt with differently as an industry,” he observed.

“If you would consider us like any other industry, a tonne of emission trading now is eight or 10 euros or so. To avoid a tonne on the automotive side costs you 10 times as much. This is not reasonable.

“The auto industry has always been different. We have different tax schemes, the customers are prepared to pay more. So the car industry is always dealt with differently and we are used to that.”

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Written byMichael Taylor
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