Ghosn: Diesel Sales Have Peaked in Europe

The popularity of diesels, which account for more than half of new-car sales across Europe, was already waning before Volkswagen AG’s diesel scandal broke, notes Renault-Nissan CEO Carlos Ghosn.

Now the decline will accelerate, he predicts. Ghosn tells reporters at the Tokyo auto show that sales are being hurt by growing opposition to diesels in such cities as London and Paris. He adds that the rising cost of meeting increasingly tougher emission standards will make diesels a less appealing option for inexpensive small cars.

Opinion about the impact on the market of VW’s self-inflicted travails vary sharply. But LMC Automotive has estimated the ratio of diesel equipped new vehicles could drop to 35% in Europe by 2020 from 53% last year. Other analysts estimate the cost to meet Euro 6 emission standards is about €1,300 ($1,400) per diesel, nearly twice the expense of achieving Euro 5 levels.

Diesels typically emit significantly less carbon dioxide and unburned hydrocarbons than comparable gasoline engines. But their formation of oxides of nitrogen—gases linked to smog and respiratory problems—is considerably higher. VW’s diesel scandal stems from its admission that it manipulated 11 million diesels so they would pass government tests but then spew roughly 30 times the allowable NOx on the road.

Last week the EC’s technical advisory committee stretched the timetable for a plan to require all new diesels to more closely match their lab-rated NOx levels with those typical in real-world driving.