A Death Blow to the Diesel Car?
Automobile research analyst at Bernstein Research, Max Warburton believes that the VW scandal could mark the beginning of the end for the global diesel car market, In an interview on the subject he stated that: “The move against VW is going to act as a catalyst to speed up the fall in diesel market share in Europe and halt it in the US.” Diesel cars already have a bad reputation amongst those consumers with an environmental interest, because of the high levels of emissions that they produce, and diesel cars are already around 10-15% more expensive to insure than petrol cars (with adequate car insurance coverage being a legal requirement in most markets) making them generally more expensive for consumers to run. This is devastating news for Europe, which has seen billions of euros extensively invested in diesel technology over the last decade, in a bid to find a cleaner and more environmentally friendly diesel engine. The fraudulent activity of the region’s largest manufacturer means that this money has been, effectively, wasted. No doubt because on of their biggest exports sits at the heart of the scandal, the German government has raised its concerns over the lack of regulation within the car industry, and costly new regulations are sure to be implemented in the short term.
Good News For The American Auto Industry?
Where there is disaster for one market it usually indicates opportunity for another, and it has been predicted that this difficult time for the European auto industry will spell an opportunity for the American auto industry to assert its authority and provide a viable challenge to the diesel market and to diesel car technology which has been dominated by the European auto industry for so long. American hybrid and electric car brands in particular could and should take advantage of the light that this scandal has shed on the need for environmentally friendly motoring. What is yet to be seen is if VW is the only manufacturer to be caught up in this kind of scandal, or if the effects may be even wider reaching that we currently perceive them to be.