5 Feb 19

Diesel is back – at least in Germany

Has the diesel dip reached the bottom of the curve? Judging by the number of new cars sold in Germany last month, consumers are slowly regaining faith in the oily fuel.

According to KBA Motor Transport Authority, overall registrations in Germany fell 1.4% in January, but sales of diesel cars increased 2.1%, giving the powertrain a 34.5-% market share.

Recovering demand from business fleets (+1.6%) and wider availability of diesel cars that comply with new Euro 6d-temp emissions standard are believed to be the motor behind the rebound.

Sales to private customers fell 7% in January, despite the massive incentives OEMs are offering to encourage owners to turn in their old diesel and buy a less polluting car.

VW expands trade-in incentives

Two weeks ago, VW announced it would extend the incentives across Germany, beyond the 15 most heavily polluted cities. Under the trade-in programme, which runs through April 30, Volkswagen will pay a bonus to any consumer trading in a Euro 4 or Euro 5 vehicle from any brand, on top of the used car value.

In its press release from January 30, VW AG said “Customers of the Volkswagen Passenger Cars brand in Germany are once again placing more orders for diesel vehicles. In 2018, the share of incoming orders for vehicles equipped with the latest diesel technology as a proportion of the overall vehicle portfolio was 43 percent compared to 39 percent in 2017.”

Demand for diesel cars from VW was particularly strong among private customers, where the share almost doubled from 15% in 2017 to 27% last year. “In Germany, the diesel debate is emotionally charged – and frequently strays from the facts. Given its high efficiency and its performance and in light of climate change, the diesel engine will remain an important technology for years to come, especially for those who travel long distances,” said Volkswagen Brand Board Member for Sales, Jürgen Stackmann.

Italy's aftershock

While Germany seems to recover from dieselgate and city diesel bans, on the other side of the Alps, the effects are only starting to manifest themselves. 

Italy's new-car sales dropped by 7.6% in January as demand for diesel vehicles kept on falling. Private customers were eager to buy a new vehicle in the first month of 2019, but rental companies, lessors and businesses were a lot less inclined to renew or expand their fleets.

For the first time since 2003, petrol-powered vehicles outsold diesel cars, which saw their share drop from 55.3 to 41.1% year on year. Hybrids rose from 3.9 to 5%, while plug-in hybrids remained stable at 0.2%.

According to Italian importer association UNRAE, the diesel share suffers from the delays in the supply of some models due to the new WLTP rules, while urban access restrictions for old diesels also deter customers.

Authored by: Dieter Quartier