Wednesday 18 July 2018

Toyota to drop diesel but VW boss predicts future despite cheat scandal

Consumers have begun to shun diesel due to scandals. Photo: PA
Consumers have begun to shun diesel due to scandals. Photo: PA

Toyota has announced plans to drop diesel models from its European portfolio this year even as Volkswagen, which sparked the fury over the technology, predicts a rebound.

The diverging views of the world's two largest car makers reflects the uncertainty over the future of diesel, which has faced a steady drumbeat of bad news since Volkswagen's cheating scandal erupted in September 2015. The German giant is expecting consumers to forgive and forget soon, as cleaner diesels hit the streets.

"Diesel will see a renaissance in the not-too-distant future because people who drove diesels will realise that it was a very comfortable drive concept," CEO Matthias Mueller said at the Geneva International Motor Show. "Once the knowledge that diesels are eco-friendly firms up in people's minds, then for me there's no reason not to buy one."

The comments are bold considering Volkswagen put aside about $30bn in provisions to cover fines, retrofits and legal costs stemming from rigging diesel-emissions systems to dupe government pollution tests. The fallout has been wide-ranging. Germany is now considering potential bans of diesel vehicles from cities, and governments including China, France and the UK have put in place plans to phase out the internal combustion engine.

Consumers have also begun to shun diesel, with its share of German car sales tumbling to a third from half since VW's cheating scandal.

In contrast, Toyota is getting rid of diesels in Europe, the main market for the technology. After refraining from a diesel variant of the C-HR crossover in 2016, Toyota will extend that decision across its portfolio.

There's more at stake than consumer choice. European carmakers have been counting on diesel - a profitable and fuel-efficient alternative to petrol cars - to meet tighter environmental regulations until electric cars become more viable.

"We need diesel to get to the CO2 goals," said VW's Herbert Diess, after presenting the all-electric ID Vizzion concept car. But PSA chief Carlos Tavares said: "At the end of the day, consumers have the final word."

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