Nissan Withdrawing From European Diesel Market, Rest of Japan Likely to Follow

Matt Posky
by Matt Posky
nissan withdrawing from european diesel market rest of japan likely to follow

Despite recent claims from Bosch that it’s prepared to save the diesel engine from becoming outlawed in Europe (which is like a prettier and less-free version of America), Nissan has announced its intent to withdraw sparkless motors from the market. Thanks to dwindling demand, the automaker claims it’s going to begin a gradual retreat until it no longer sells diesel vehicles in the region.

The announcement follows a similar plan unveiled by Toyota in March of this year and calls into question what the remaining Japanese manufacturers will decide in the months to come. Nissan said Monday that it will shift its focus to electrified vehicles, hoping the emerging technology can fill the void. But European manufacturers have the most to lose as the market changes.

“The Japanese especially I could see doing this, since they were more skeptical of the technology from the beginning and don’t have a lot of competence in the field,” Stefan Bratzel, director of automotive management at the University of Applied Sciences in Bergisch Gladbach, Germany, told Bloomberg in an interview.

However, Japanese manufacturers accounted for just over 12 percent of European deliveries last year and the majority weren’t diesels. Around 16 percent of Nissan’s European volume comes from diesel variants, which is higher than other Japanese automakers but insignificant compared to domestic models.

BMW’s fleet, which includes Mini, was 64 percent diesel in 2017 and Mercedes-Benz stood at 62 percent. Meanwhile, Jaguar Land Rover sat at an astronomical 90 percent. Stricter emissions limits, new taxes on diesel vehicles, and looming bans are suppressing sales, and European automakers have far more to lose than their Japanese counterparts. This level of reliance on one fuel type will cause major problems as its market share dwindles.

The silver lining is the gradual nature of the diesel decline. Already losing popularity before Volkswagen’s emission cheating scandal in 2015, the subsequent drop in volume hasn’t sheared its market share off at the knees. But the drop is significant. Market penetration for diesel vehicles sat at 52 percent when news of the scandal broke; it’s now closer to 44 percent.

Analyst projections vary, but the general consensus sees Europe’s diesel market shrinking to around 40 percent by the end of the year. IHS Markit anticipates the gradual decline to continue, with sales around 32 percent by 2025, though other sources estimate numbers as low as 12 percent within the same timeframe. We expect the final tally to be highly dependent upon the speed of electric vehicle technology development and EU regulations in the near future.

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  • MR2turbo4evr MR2turbo4evr on May 09, 2018

    Good, educated comment. I've lived in Germany for about 11 years. Excellent country, good people, but you'll never convince them that makers from other countries are better at anything, especially if they are Japanese.

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    • ThomasSchiffer ThomasSchiffer on May 09, 2018

      As a German I can confirm that we are proud of our industry and products, but we are not blind. We want well-engineered and well-built and high quality products like everyone else and we know that our cars are well-made and of a high quality standard. They say that we are our own industries’ hardest critics. This is true. We love to complain about our politicians, our laws and of course our cars. You will find plenty of Germans who have something negative to say about German cars, just like you will find plenty of Americans who will insult American cars. One of my co-workers is Japanese who has been living in Germany since the 1990s. He is a passionate BMW and Mercedes fan and has owned vehicles from the two brands over the last decades. Currently he drives a BMW 320d Touring and - believe it or not - has very unpleasant things to say about most Japanese cars (mainly that they are dull to drive and have rather questionable aesthetics). At the end of the day these are all subjective opinions to which we as free human beings are more than entitled to. Nonetheless Japanese cars are very popular here but none of them, with the exception of the Mazda brand, appeal to me. Mazda has always been the best-selling Japanese brand in Germany was they were also one of the first Japanese brands to enter our market. My only experiences with Japanese cars are limited to the Lexus IS220d (awful car), the current Toyota Avensis (incredibly dull and poor-handling) and the late 1980s or early 1990s Toyota Crown V6 which my brother drove in the early 1990s (he bought it used). I actually liked that Toyota Crown. They were rare and sold poorly here but it was a nice car offering a wonderful blend between comfortable cruising and a touch of sport. That’s all I remember about it, and the squeaking rear suspension. I am currently considering a new gasoline-powered family car for my wife and our three teenage children, and the Mazda 6 Wagon and Skoda Octavia Combi VRS are at the top of my list. But for convenience sake I may very well end up with the Skoda as I live close to a Skoda dealership. The Octavia to me is a more intelligently designed car than its rival from Toyota (Avensis). What I mean with that is that when I test drove the Octavia I immediately felt very comfortable in it. The seating position and cockpit layout were very intuitive and ergonomic. In the Avensis I did not feel as comfortable, the interior layout was not as well-designed as in the Octavia, and the engine felt very gutless. I have yet to drive the Mazda 6 Wagon. Hopefully I can schedule a test drive in the upcoming weeks.

  • Cpthaddock Cpthaddock on May 09, 2018

    Matt - no doubt it was intended as a humorous comment (usually greatly appreciated), but in my experience the majority of US citizens labor under massive delusions about freedom. Here are some right wing organizations that don't even agree that the USA is the world's top most utopia of freedom, with several European countries ahead and, gulp, Communist China's own Hong Kong in the #1 spot. https://www.heritage.org/index/ranking https://www.cato.org/human-freedom-index The fact is that the USA is struggling to prevent the erosion of many important freedoms. There are too many areas where we are regressing and becoming less free to let a throwaway comment pass. Look up Freedom and you don't see a picture of smiling redneck waving a flag or a gun. We like to tut tut Mr. Putin's "free and open" election, but we live in a country that suffers from appalling voter suppression, and gerrymandering that has taken our national politics to a dangerous place out of step both with it's citizens and the international community. Thanks in large part to cell phone cameras, we all now know that if you're a brown person in the USA, you enjoy massively less freedom that someone with light skin. Freedom is no longer something that can be thrown in the grab bag of largely ignorant statements that educated folks skip over when they hear them. Freedom is actively being driven out of this country, directly and indirectly, by the political extremism of our time.

  • SCE to AUX Probably couldn't afford it - happens all the time.
  • MaintenanceCosts An ugly-a$s Challenger with poor equipment choices and an ugly Dealership Default color combination, not even a manual to redeem it, still no sale.
  • Cha65689852 To drive a car, you need human intelligence, not artificial intelligence.Unfortunately, these days even human brains are turning into mush thanks to addiction to smartphones and social media.
  • Mike1041 A nasty uncomfortable little car. Test drove in 2019 in a search for a single car that would appease two drivers. The compromise was not much better but at least it had decent rear vision and cargo capacity. The 2019 Honda HRV simply was too unforgiving and we ditched after 4 years. Enter the 23 HRV and we have a comfy size.
  • SCE to AUX I wonder who really cares about this. "Slave labor" is a useful term for the agendas of both right and left."UAW Wants Auto Industry to Stop Using Slave Labor"... but what will the UAW actually do if nothing changes?With unrelenting downward pressure on costs in every industry - coupled with labor shortages - expect to see more of this.Perhaps it's my fault when I choose the $259 cell phone over the $299 model, or the cheaper parts at RockAuto, or the lower-priced jacket at the store.Do I care about an ethical supply chain? Not really, I just want the product to work - and that's how most consumers are. We'd rather not know.Perhaps the 1990s notion of conflict-free, blood-free, ethically-sourced diamonds will find its way into the auto industry. That would be a good thing.
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