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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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.
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.