PSA, Renault, Opel and Fiat set to be hit by fallout from VW's diesel test cheating
PARIS (Bloomberg) -- PSA/Peugeot Citroen, Renault, Fiat and Opel may be hit by Volkswagen's entry that it rigged diesel engines to deceive U.S. regulators as the disclosures help to hasten the technology's fall in Europe.
Together with the gas methods currently under-attack in the area due to pollution concerns, Volkswagen's diesel screening scandal might lead to the market-share of diesel vehicles to fall to as little as 3-5% of automobiles sold in Europe in 20 22 from 5 3% in 2014, based on business advisor LMC Automotive.
"Europe will go down especially in the section for smaller vehicles," said Sascha Gommel, a Frankfurt-based analyst at Commerzbank. With sub-compacts such as the Peugeot 208, Renault Clio and VW Polo, "you can not cost your client for the added content that wants to go in the automobile in order to adhere to ordinance," he stated.
Diesel-driven versions accounted for 5 3% of new-car registrations in EU countries in 2014, down from 55% in 2011, in accordance with the European sector body ACEA. That compares with about one per cent in the U.S.
Unlike German luxury-vehicle manufacturers Audi, Mercedes Benz and BMW Team, quantity automakers including Fiat, Opel, Renault and PSA offer mass market diesel hatchbacks and compact vehicles, on which margins are lower.
A backlash against diesel by buyers and more rigorous scrutiny from regulators would allow it to be even more demanding for car makers in Europe to match tightening guidelines on gas usage and carbon dioxide emissions. That may suggest an accelerated shift to hybrid vehicles, which are expensive to make simply because they include combustion engines in addition to electric motors.
However, the backing for diesel stays, perhaps not least because of lower running costs for motorists. Nearly all European Union states tax the fuel-less than petrol, plus it provides about 30% better mileage. And Germany's manufacturing companies are not stopping, both.
"We nonetheless value diesel," Rupert Stadler, chief of Volkswagen's Audi manufacturer, mentioned in a summit Thursday in Frankfurt. "The client has determined that diesel provides the most appealing cost of ownership. So diesel must not be demonized."
Because the VW scandal broke yesterday, PSA's shares have plunged 13% and Renault has fell 9.5%, wiping out a joined 3.7 billion euros ($4.1 billion) in market capitalization. Both French producers, as well as Fiat Chrysler Cars and Opel, are most apt to be damage by any European contraction in-demand for diesel automobiles, Gommel states.
The 2nd best selling diesel vehicle in Europe this year is going to be the Renault Clio hatchback with over 286 286,000 automobiles offered, LMC Automotive estimates.
Sales of diesel automobiles accounted for 6-8% of PSA's European car revenue a year ago, while the figure was 60% for Renault.
"We possess the industrial capability to accommodate to the brand new demand," Renault spokesman Bruno Moreau stated. "And we're a leader in the electric vehicles marketplace," along with Japanese partner Nissan.
Pierre-Olivier Salmon, a PSA spokesman, declined to comment.
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