1 déc 17

“Mass exodus” from diesel in Belgium and Netherlands

As it experiences a “mass exodus” away from diesel in the key automotive markets of Belgium and the Netherlands, online vehicle remarketing specialist Autorola is providing customers with the export and import channels to support the move to petrol, hybrids and EVs. 

The Dutch government’s Green Deal aims to reduce overall emissions to improve air quality, among other things by reducing the personal tax of company car drivers if they choose a low-emission car – whether a diesel or petrol car, a hybrid or non-hybrid. Considering company cars make up half of the country’s annual new-car sales, this is a measure with major impact.

Tax bill
The current Dutch tax bill on a typical non-hybrid fossil-fuel company car – say, an Astra five-door – is €120 to €140 per month. On an electric vehicle such as a Nissan LEAF or a Chevrolet Ampera, that bill is €50, and potentially down to zero. This is the incentive behind the recent massive increase in EV demand in the Netherlands. 

Additionally, since 1 January 2017, zero-emission cars only require a 4% tax on the purchase price. All other cars are taxed 22%. Barring a sudden change in company car taxes, the trend of company motorists replacing their petrol or diesel cars with zero-emission alternatives looks likely to continue.

Shifting incentives
The Dutch government initially reduced tax on low-emission cars, encouraging company drivers to go for diesels such as the Renault Mégane and the Peugeot 308. “But as this did not contribute enough to CO2 reduction, the incentives were shifted to zero-emission vehicles only”, says Zijad Halilovic of Autorola Netherlands. 

Autorola believes the new car market is now more stable as the government seems to have got its plan right and the growth in zero and low emission EVs is already proving positive, but the used car market remains in turmoil.

It will take up to three years before the used-car market reaches equilibrium, says Halilovic: “The used-car market is still trying to play catch-up, and currently is in disarray: the consumer demand for used cars does not match the supply of used cars coming back off leasing fleets and finance from banks”. 

Out of love
In Belgium – a country where diesel dominated for decades – the market has been equally swift to shift its allegiances. Following fiscal reform which lowered registration and road taxes for petrol, hybrid and electric cars, these ‘greener’ cars provide companies with higher tax deductions, and employees with lower vehicle taxes. 

Add to that the fact that the price advantage for petrol over diesel at the pumps has disappeared, and it becomes obvious why the Belgian market has fallen out of love with diesel virtually overnight. 

“For many years Belgium was nearly 95% in favour of diesels based on their fuel consumption, reliability and strong running costs,” explained Erwin Coesens, country manager for Autorola Belgium. “This has changed very quickly, with car makers now offering a wide range of petrol, hybrid and EV options that are finding favour with both consumers and company motorists,” he added.

Flushed out
When the Belgian government introduced its new green automotive policy, the immediate effect was felt by the cars already on the road, as well as new purchase cars. As a result, private motorists have been moving towards petrol, mainly – as hybrids and EVs have yet to hit the Belgian markets in significant volumes. And that is the biggest challenge for the remarketing industry also – consumers want to buy only (used) petrol cars. 

“Our used car traders and franchised dealers are desperately looking to buy used petrols to satisfy demand. Consumers are willing to pay more for petrols, while used diesels have fallen in price. There simply aren’t enough petrols to go around and there won’t be for another two to three years, until the large number of diesels are flushed out of the system,” said Coesens.

Used-car shortage
One way to flush diesels out of the system is to export them, to other countries in Western and Eastern Europe, and that is the strategy Autorola is pursuing for its clients in Belgium and the Netherlands – OEMs and leasing and dealer groups. 

It’s a matter of knowing where demand exists for the excess supply in the Low Countries. Portugal, for instance, is experiencing a used-car shortage, with diesel versions of both the Renault Mégane and the Peugeot 308 in high demand. Other popular target countries include Germany and Denmark. 

Other direction
In the other direction, OEMs and their dealers are forced to import used petrol cars into the Netherlands and Belgium, in order to satisfy current demand. They do this by bidding on and importing small to medium-sized used-petrol cars from across mainland Europe. 

“Autorola Netherlands has seen major growth over the past 2 to 3 years, based on more used cars being imported and exported through our portal”, says Halilovic. “The growth of this cross-border used-vehicle trade is forcing OEMs, leasing companies and dealer groups to think on a European level, not just on a country level. For some this is very difficult. But only those that think on a European level will survive”.

Authored by: Frank Jacobs