Number of diesel cars keeps growing in Europe

OREANDA-NEWS. May 23, 2016. Calls by politicians for measures to reduce the use of diesel cars has so far failed to prevent continued growth in three out of Europe's four largest markets. France is the notable exception.

Among the first proposals announced by London's newly elected mayor Sadiq Khan last week was a diesel bus scrappage scheme the latest in a series of policies in European countries to reduce emissions, especially from diesel, since 2014. Despite such policies, the number of newly registered diesel cars in Germany, the UK and Italy totalling 1.36mn was 7pc higher in January-April than a year earlier. Their growth overshadowed a 4.2pc shrinkage in France to 362,000. The increase was highest in Italy at almost 19pc (see graph 1).

Growth in new diesel registrations may be slowing in Germany, but the proportion of diesel cars in Germany's as well as the UK's and Italy's total fleets keeps on rising. A faster rise in gasoline cars reduced the diesel share in new car registrations so far this year to 47.2pc in Germany, from around 48.4pc a year earlier.

But these reductions are far less significant than the large increase compared with the existing fleet. Only 31.2pc of cars on German roads were diesel at the start of 2015, and 37.8pc in the UK. In the absence of a targeted scrappage scheme, the new registrations will add to the share of diesel in cars on the road (see graph 2).

In France, Europe's third largest car market, the trend is reversing, largely thanks to a diesel scrappage scheme that started in April 2015.

French drivers registered 4.2pc fewer diesel cars than a year earlier and 9.4pc fewer than in 2014. Together with the removal of old diesel cars rewarded under the scrappage scheme, this is likely to reduce the share of diesel cars in use from 62.2pc at the beginning of 2014, the latest figure published (see graph 3).

Pump prices seem to only have a limited short-term effect on drivers' car purchases.

Cheaper diesel, compared with gasoline, at French pumps has failed to prevent French drivers' shift away from diesel to the more expensive fuel. French taxes on diesel remain 0.14/l lower than on gasoline, although the government is shrinking this gap every year.

In the UK, more buyers this year are choosing gasoline over diesel this year than last, despite gasoline having risen to an average ?0.08/l premium to gasoline in the first quarter from a negligible ?0.004/l a year earlier.

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Graph 1 Car registrations Jan-Apr '000 cars

Graph 2 Germany: cars in use and newly registered % of total

Graph 3 France: cars in use and newly registered % of total