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March 03, 2017

Death of Diesel

When we reported on the VW scandal, we made the point that the really important implications are not the fines but the long-term industrial fallout. The long term is already happening now. The diesel technology is experiencing a rapid decline in Germany. Frankfurter Allgemeine leads its business section with the decision by the state government of Baden-Wuerttemberg to ban diesel cars in Stuttgart, the state capital. Stuttgart is Germany’s equivalent of Motown, the home of both Mercedes-Benz and Porsche. Furthermore, a court in Bavaria has asked the state government to consider a similar ban for Munich. The sales statistics also support the trend against the diesel car. In February, the number of diesel cars sold sank by 10%, while the rest of the market was largely stable. 

There are several reasons for the dramatic decline in diesel sales. The VW scandal is clearly the trigger, along with revelation that the entire industry has cheated, and that there was a probable collusion by the German government and the European authorities. 

Frankfurter Allgemeine is really incensed about this trend. The diesel cars have fewer carbon dioxide emissions, and Germany will find it harder to meet its climate goals if people switch from diesel to petrol. The problem with diesel is, of course, the pollution by emission of fine particles, the concentration of which is particularly high in big cities.

Around 90% of all German diesel cars - those that do not fulfil the Euro 6 emissions norms - are affected. There are further court cases in favour of a similar rule for the cities of Berlin, Essen, Cologne, Aachen, Frankfurt and Mainz, FAZ reports. This means that diesel will become a rogue techology very soon. Owners of diesel cars may be able to sue for compensation, but the political trend in Germany is now clearly against diesel technology.

The accompanying comment on this story makes the point that this cannot be about the relative merits of diesel versus petrol because the statistical evidence is rather mixed. This is at its core about a rejection of the motor car itself. We would agree with that conclusion, with the important exception that we consider it a largely positive development for society. But it poses a problem for the industrial fabric of a country that has become more dependent on the car industry than any other country in the world.

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