Analysis: U.S. diesel sales to suffer due to Volkswagen scandal

(September 29, 2015) LONDON — Expected penetration of diesel in the light vehicle market in the U.S. has been significantly downgraded due to the Volkswagen diesel emission fixing story, according to the automotive analysts at just-auto's QUBE.

In previous just-auto QUBE US diesel forecasts it had been considered there was reasonable upside to the diesel market in the U.S., due in part to Volkswagen's efforts to develop the diesel market in the country. As a result, more automotive manufacturers (OEMs) — including Europeans — were advanced in planning to add diesel light vehicles to their offerings in the U.S.


Now, however, QUBE's analytical team consider that the U.S. market's diesel upside has largely diminished due to the mistrust for diesel that will have spread after the revelation that US government regulators found software in Volkswagen vehicles that produced false emissions data, resulting in the resignation of VW CEO Martin Winterkorn.

QUBE's research team now see diesel penetration in the U..S reverting to 3-4% in the long-term against the previous forecast of over 7.5% penetration in the future.  It is considered that diesel, as a light vehicle fuel, will revert to mainly seeing use among medium-and heavy-duty pickup trucks.

As Calum MacRae, QUBE's head of development, explained, "The Euro VI regulations closely align with current U.S. NOx requirements, to the extent that offering a diesel on the U.S. market brings little incremental cost for OEMs.

"Diesel as a light vehicle fuel in the U.S. has a bit of a trust deficit in any case. For one, many consumers associate it with heavy commercial vehicles; second, many consumers will still recall GM's failed Oldsmobile diesel engine of the early 1980s," added MacRae.

QUBE's analysts have also announced that they anticipate a steepening in the decline of diesel-fueled vehicles in the European car market.

About just-auto and QUBE
just-auto.com exists to provide news, analysis and market intelligence to support the automotive industry.