Dieselgate came as a big shock to the industry, even though ever tighter regulations meant fudging of the figures had probably been going on for a long time. Most likely by more than one car maker too, it just happened to be the world’s biggest that was caught in the act.
Since then Diesel has been under fire for its particulate spewing nature. Cities around the world have levied taxes on them, or outright wanted to ban them in some areas. But are residual values being affected?
Cars depreciate in value over time, that’s a given. Petrol sales are on the rise globally, after Diesel being given a bad name. Delving deeper into the numbers, the outlook isn’t as bleak as it looks.
According to CAP HPI, the diesel sector has only dropped by around 8% in 2017. Scaremongers had touted figures as high as 25% after dieselgate. Those numbers have started to slide a little in the last few months, especially in the UK where the new car market is heading for a downturn. Year on year diesel sales are actually down 29.9%, but that has to account for the falling marketplace too.
Europe actually seems to be bearing the brunt of the diesel downturn. Germany announced a 19.3% fall in diesel sales during April alone, showing how wild and volatile the marketplace can be.
But even though dieselgate was a global issue, some markets seem to be bucking the trend. In Australia, the ABS (Australian Bureau of Statistics) came out with some interesting numbers earlier this year.
It turns out that diesel car sales in Aus are up a huge 57% since 2012.
Petrol ownership has decreased from 88.1 to 75.7 in the last five years, and all this info came out in the same month as France announced a diesel sales ban by 2040.
A large factor in those increases is thanks to Australia benefitting from relaxed diesel emission laws. Vehicles currently abide by the multinational EU5 governing. Most of the EU have been running EU6 standard cars since 2014. This is a point bought up by Michael Bartsch, MD of Volkswagen Group Australia –
I think that it was easy to grab the lines out of the United States to say that exhaust emissions were 30 times higher than what it should have been without terribly much gone into looking behind what that means.
Back in 2016, the Amarok being sold in Aus was only required to meet EU4 standards, which was roughly 390 grams of NOx per KM. In the USA, that same vehicles was only allowed to emit 30 grams per mile driven. You can see why cheat devices were needed.
Even after the Amarok was recalled to have new software flashed, it still emitted the same 220/230 grams per KM - the same as it did before the fix.
When the law states you can only produce 390 grams/KM, being over a hundred grams under makes the vehicle look super clean.
Basically, dieselgate hasn’t touched Australian residual values, primarily due to the lax emission regulations. The Australian Government's Ministerial Forum on Vehicle Emissions are still deciding if they should abide by the new Euro 6 standards. Until that time, resale values down under should remain unharmed.