VW scandal set to choke diesel car industry

Reaction, repercussion grows in Europe due to concerns about air pollution as well as links to premature fatalities

the Volkswagen scandal in america could scarcely have come in a worse time for diesel carmakers as they confront a installation air pollution backlash in European countries, their biggest market.
Through the French capital of Paris, france to the English city of Liverpool, calls for a crackdown upon diesel vehicles - as well as outright bans - possess escalated in the past year like a growing body of research hyperlinks the cars’ pollution along with thousands of premature deaths.

Numerous analysts expect the after effects from the VW scandal in order to prompt tougher and more expensive regulations, and some are increasing a question that would have been impossible even a year ago: may be the diesel car on the deathbed?
“The move towards VW is going to act as the catalyst to speed up the actual fall in diesel market share within Europe and halt this in the US, ” says Maximum Warburton, analyst at Bernstein Research.
“Regulators will now become much more conservative about what they allow and much tougher real-world assessments may prove either as well difficult - or too costly - for diesel to satisfy. ”
That spells possible disaster for European carmakers that have invested tens of vast amounts of euros in diesel technologies over the last 15 years. Authorities across the continent embraced diesel powered cars to help combat environment change.
Diesel engines utilize less fuel per km than the petrol equivalents which once dominated Europe’s highways, so they produce less co2, the most prevalent man-made green house gas.
It was known that will diesel cars also generate more harmful pollutants that may damage lungs when inhaled. But progressively tighter EUROPEAN UNION pollution control standards dating back to to 1992 were designed to ensure diesel car producers made clean engines in which trapped such gases.
Because governments launched tax breaks along with other incentives encouraging diesel automobiles, such as cheaper parking costs, the industry responded by generating more models. With diesel-powered costing less than petrol in numerous places, the sector exploded.
Of the 10m diesel vehicles sold worldwide in 2014, three-quarters of them were purchased in Europe.
Diesel additionally represents a disproportionately wide range of European carmakers’ domestic product sales.

Most exposed, according to investigation by analysts at Exane BNP Paribas, are CHEVROLLET and Daimler, the German born carmakers, whose “diesel mix” - those vehicles as being a proportion of sales -- is 81 per cent and also 71 per cent respectively inside Europe.
Volvo of Laxa, sweden is even higher, in 90 per cent. For Renault and Peugeot, the France carmakers, the figure is usually more than 50 per cent.
Diesel automobiles are still a niche product in the usa, accounting for less than 4 % of sales.
But the NOVA scandal has exposed any willingness of US regulators to check into potential breaches of air pollution standards that has been lacking in The european countries.
The EU’s softer strategy may have initially helped the particular diesel industry flourish in The european union, but it also appears to have included the seeds of it is current woes.
The Washington-based Environmental Protection Agency took action in opposition to VW after the International Authorities on Clean Transport, a good environmental research group, revealed real-world emissions of nitrogen oxide, or NOx, from the VW Jetta exceeded allowed levels in the US by as much as 35 times, while some sort of VW Passat was around 20 times over the restrict.

The car industry has been tossed into turmoil after Volvo admitted cheating on US emissions tests for its diesel autos. Matthew Vincent discusses typically the burgeoning scandal with Andy Sharman, FT car business correspondent.
“The disparity between real-world performance of diesel-engine cars and laboratory examination results has long been viewed as a new ticking time bomb along with revelations surrounding VW’s emissions-rigging have pushed the issue in to the spotlight, ” says Rich Gane, director and auto sector specialist at Vendigital, a supply chain organization.
Mr Gane adds a big part of the diesel market throughout Europe could switch to petroleum “virtually overnight”.
EU regulators are due to start performing real-world checks of cars’ air pollution from 2017 however it is long overdue, states Nick Molden, chief executive associated with Emissions Analytics, a private business that tests vehicles’ gas efficiency and emissions in reside conditions in the EU and also the US.
“We have examined 250 European diesel cars and trucks over the past four years and just five met their requirements, ” he adds.
Among the five was VW, that Mr Molden says offers produced “some of clearest cars in Europe”.
Their tests show many carmakers are technically capable of creating clean diesel vehicles. The actual ICCT research that assisted trigger the EPA analysis into VW also demonstrated a BMW diesel vehicle was meeting the correct specifications.

But Philippe Houchois, expert at UBS, says this particular points to a big difference in the market for diesel engine cars.
He thinks diesel-engined as a fuel option will probably disappear for smaller vehicles - ranging from the VOLKSWAGEN Golf down to compact town vehicles - because the expense of technology to clean up their own emissions means profit margins might be too thin.
That price equation explains why OF HIGH QUALITY and Daimler generally carry out better in NOx lab tests, since their cars market at a higher price point.
Eventually, Europe’s diesel car market must now prove it offers up vehicles that do not harm air quality, says Frank Kelly, professor of environmental wellness at King’s College, Greater london, whose research helped concentrate on the dangers.
“If the industry may show they really can give us with a very low emission diesel powered vehicle, then I think there is a possibility that once the dirt settles, we can go back to not really worrying, ” he provides.
“But if they can’t do this, I think they are going to lose belief with government and a lot of the general public and I think there will be a slower demise of these vehicles. ”

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