Is diesel about to go the way of the dinosaur?

When ‘dieselgate’ first hit in 2015, many industry commentators speculated that it was to have a dramatic impact on the car market.

Just under two years later, it’s probably too early to make any definitive statement about all of its long term consequences; however we are beginning to see notable changes in the success of diesel cars in retail.

From January to the end of May this year, diesel sales dropped 8.8% compared to the same period in 2016. In comparison, petrol car sales increased 5.8% over the period, with alternative fuel vehicles (AFV) jumping 27.2%.

This trend looks set to continue, with a recent survey by Autocar finding a significant number of diesel car drivers looking to change fuel type with their next cars.

Interestingly, the two key reasons people gave for ditching diesel were environmental concerns (73%) and fears over residual value (41%).

The residual value fears have been backed by cap hpi, which is one of the leading experts on the topic in the country. The company has found increasing downward pressure on diesel prices recently.

James Dower, senior Black Book editor at cap hpi, has noted: “Customers continue to be nervous on the diesel issue, it is interesting to see that this appears to be driving strength into both Petrol and Hybrid fuel types. While consumer confidence seems to have remained strong despite recent events, the increased stock levels felt both at wholesale and retail levels is likely to continue to lead to values reducing at a slightly higher rate than experienced last year.”

Delayed reactions?

The story was somewhat different six months ago. Over the whole of 2016, diesel sales actually increased slightly. While the market in 2016 grew at a faster rate, diesel’s market share only fell slightly – from 48.5% to 47.7%. In comparison, its market share for the five months to June is just 44.0%.

Meanwhile in September 2016, What Car? found that Volkswagen, Audi and Skoda cars were generally still retaining their values reasonably well.

Since then, however, the situation has declined markedly, and there are no guarantees that the situation will reverse.

So why are diesel cars struggling more and more, the further we get from the original spark?

There are probably a number of factors, and one of them may well be fears around legislation. Several politicians, concerned about air quality, have made noises about either banning certain types of diesel car in urban areas, or adding charges for them. A car which you may have to pay an extra charge for to drive in London, or that you may simply not be able to drive there are all, will be less appealing generally than a petrol or AFV car without the same worry.  

There is always a chance these figures could be an example of a downturn, and that diesel sales may recover.

But with the constant bad press, and the increasingly viable AFV market growing, there is a strong chance diesel’s decline will continue.