Three's a Trend: More EU Diesel Exits to Follow Nissan, Toyota

(Bloomberg) -- Nissan Motor Co.’s decision to quit sales of diesel cars in Europe, where demand has slumped since Volkswagen’s emissions cheating, is set to see more automakers join in.

Japan’s second-largest carmaker will phase out diesel versions of passenger cars when the models are revamped as focus shifts to electrified variants, to concentrate on sales of electrified vehicles instead, Nissan said earlier Monday. Together with Toyota Motor Corp., which announced they’d leave the technology behind in March, the pair had market share of 8.6 percent in the region during the first quarter, according to the European Automobile Manufacturers’ Association.

“The Japanese especially I could see doing this, since they were more skeptical of the technology from the beginning and don’t have a lot of competence in the field,” said Stefan Bratzel, director of automotive management at the University of Applied Sciences in Bergisch Gladbach, Germany, naming Honda Motor Co. and Mazda Motor Corp. as two likely candidates.

Japanese carmakers accounted for over 12 percent of European deliveries last year.

Consumer demand for diesel vehicles has slid ever since Volkswagen AG’s cheating on emissions regulation became public in September 2015, with concern spreading as more carmakers became embroiled in the ensuing fallout. The demise of diesel, a technological mainstay for carmakers like Volkswagen and BMW AG, and tougher emissions standards on carbon dioxide that’ll come in from 2020, is accelerating the rollout of electrified vehicles and plug-in vehicles.

Potential consequences from the scandal include driving bans in German urban areas to improve air quality. The city of Paris has already banned older diesels. Manufacturers, including Nissan, have sought to counter consumer concerns by offering programs that would swap a diesel for a new gasoline model in case a customer is affected by inner-city restrictions.

Nissan sold 128,456 diesel cars in Europe last year, or about 16 percent of its total deliveries in the region, according to Bloomberg Intelligence. For Toyota, diesel made up less then 10 percent of sales last year in the region, the company said in March. That compares with about 65 percent for BMW.

--With assistance from Ma Jie

To contact the reporter on this story: Oliver Sachgau in Munich at osachgau@bloomberg.net.

To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, Anthony Palazzo at apalazzo@bloomberg.net, Elisabeth Behrmann

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