Germany’s ‘Diesel Fear’ Leaves $Five Billion in Used Cars Gathering Dust
Germany’s ‘Diesel Fear’ Leaves $Five Billion in Used Cars Gathering Dust
VW, Daimler, BMW Agree to Diesel Auto Upgrades
Germany’s back and forward over potential bans for diesel cars in cities is sapping request for the vehicles and causing a backlog of used models on dealer lots that’s swelled to some Four.Five billion euros ($Five.Trio billion).
A deal earlier this month inbetween Germany and Volkswagen AG, Daimler AG and BMW AG to upgrade five million newer diesel cars and suggest trade-in incentives on older models hasn’t eliminated concerns about pollution from the technology. Citing government tests, German Environment Minister Barbara Hendricks told reporters this week that the planned software upgrades are “insufficient” for many cities to meet the legal limit for smog-inducing nitrogen oxides in the air.
As a result of the doubts surrounding diesel’s future, about 300,000 used vehicles fitted for Euro-5 emissions standards that were on sale as fresh cars as recently as September 2015, are piling up, according to a survey published Thursday by German car dealer association ZDK. The poll assumed an average price of 15,000 euros per car.
“The vehicles are hard to sell at the moment because customers are uncertain,” Thomas Peckruhn, vice president of the association, said in an emailed statement. “We need clear signals from government if and under what conditions these vehicles might be affected by driving bans.”
Price Decline
Car-company bosses and government officials reached a compromise deal earlier this month to lower pollution. They agreed on software updates instead of more costly hardware fixes that are sought by environmental groups. The measures have been criticized as a spank on the wrist for Germany’s fattest industry, which is accused of making cars that pollute more on the road than under test conditions.
Reflecting weakening request, some twenty nine percent of diesel drivers in Germany said they’d attempt and sell their cars as soon as possible because of concerns about falling values as cities mull driving bans, according to a survey by market researcher Deutsche Automobil Treuhand. As a result of slow sales, seventy seven percent of dealers said they had cut prices, the ZDK said.
Pressure on used car prices, particularly such relatively youthful vehicles, is expected to further intensify as a result of the automakers’ trade-in bonuses for outdated diesel vehicles, the DAT said. Volkswagen is suggesting as much as Ten,000 euros on cars with Euro-1 to -4 emissions standards. The bonus is paid only when customers exchange their old diesels for fresh cars, making “youthfull” used ones less attractive.
As many as twenty percent of drivers, or 1.Trio million car owners, could take up the manufacturers’ offers, according to consulting rigid Oliver Wyman.
‘Fear’ Factor
The value of used diesel cars is an significant factor in the calculations for carmakers’ sizable fleet sales, and plunging prices could trigger writedowns in their lease portfolios. In Daimler’s case, half of its car sales are either financed or leased by its financial services unit. There are about six million diesel cars with the older Euro five emissions standard registered in Germany presently, according to the country’s Federal Transport Authority.
“The fresh ‘diesel fear’ among customers has significant consequences for car companies,” Cedric Perlewitz, head of automotive at Commerzbank, said in a report Thursday. “Carmakers need to significantly expedite their strategic shift to electrical cars.”
Germany’s ‘Diesel Fear’ Leaves $Five Billion in Used Cars Gathering Dust
Germany’s ‘Diesel Fear’ Leaves $Five Billion in Used Cars Gathering Dust
VW, Daimler, BMW Agree to Diesel Auto Upgrades
Germany’s back and forward over potential bans for diesel cars in cities is sapping request for the vehicles and causing a backlog of used models on dealer lots that’s swelled to some Four.Five billion euros ($Five.Trio billion).
A deal earlier this month inbetween Germany and Volkswagen AG, Daimler AG and BMW AG to upgrade five million newer diesel cars and suggest trade-in incentives on older models hasn’t eliminated concerns about pollution from the technology. Citing government tests, German Environment Minister Barbara Hendricks told reporters this week that the planned software upgrades are “insufficient” for many cities to meet the legal limit for smog-inducing nitrogen oxides in the air.
As a result of the doubts surrounding diesel’s future, about 300,000 used vehicles fitted for Euro-5 emissions standards that were on sale as fresh cars as recently as September 2015, are piling up, according to a survey published Thursday by German car dealer association ZDK. The poll assumed an average price of 15,000 euros per car.
“The vehicles are hard to sell at the moment because customers are uncertain,” Thomas Peckruhn, vice president of the association, said in an emailed statement. “We need clear signals from government if and under what conditions these vehicles might be affected by driving bans.”
Price Decline
Car-company bosses and government officials reached a compromise deal earlier this month to lower pollution. They agreed on software updates instead of more costly hardware fixes that are sought by environmental groups. The measures have been criticized as a smack on the wrist for Germany’s fattest industry, which is accused of making cars that pollute more on the road than under test conditions.
Reflecting weakening request, some twenty nine percent of diesel drivers in Germany said they’d attempt and sell their cars as soon as possible because of concerns about falling values as cities mull driving bans, according to a survey by market researcher Deutsche Automobil Treuhand. As a result of slow sales, seventy seven percent of dealers said they had cut prices, the ZDK said.
Pressure on used car prices, particularly such relatively youthfull vehicles, is expected to further intensify as a result of the automakers’ trade-in bonuses for outdated diesel vehicles, the DAT said. Volkswagen is suggesting as much as Ten,000 euros on cars with Euro-1 to -4 emissions standards. The bonus is paid only when customers exchange their old diesels for fresh cars, making “youthful” used ones less attractive.
As many as twenty percent of drivers, or 1.Three million car owners, could take up the manufacturers’ offers, according to consulting rock-hard Oliver Wyman.
‘Fear’ Factor
The value of used diesel cars is an significant factor in the calculations for carmakers’ sizable fleet sales, and plunging prices could trigger writedowns in their lease portfolios. In Daimler’s case, half of its car sales are either financed or leased by its financial services unit. There are about six million diesel cars with the older Euro five emissions standard registered in Germany presently, according to the country’s Federal Transport Authority.
“The fresh ‘diesel fear’ among customers has significant consequences for car companies,” Cedric Perlewitz, head of automotive at Commerzbank, said in a report Thursday. “Carmakers need to significantly expedite their strategic shift to electrical cars.”
Germany’s ‘Diesel Fear’ Leaves $Five Billion in Used Cars Gathering Dust
Germany’s ‘Diesel Fear’ Leaves $Five Billion in Used Cars Gathering Dust
VW, Daimler, BMW Agree to Diesel Auto Upgrades
Germany’s back and forward over potential bans for diesel cars in cities is sapping request for the vehicles and causing a backlog of used models on dealer lots that’s swelled to some Four.Five billion euros ($Five.Three billion).
A deal earlier this month inbetween Germany and Volkswagen AG, Daimler AG and BMW AG to upgrade five million newer diesel cars and suggest trade-in incentives on older models hasn’t eliminated concerns about pollution from the technology. Citing government tests, German Environment Minister Barbara Hendricks told reporters this week that the planned software upgrades are “insufficient” for many cities to meet the legal limit for smog-inducing nitrogen oxides in the air.
As a result of the doubts surrounding diesel’s future, about 300,000 used vehicles fitted for Euro-5 emissions standards that were on sale as fresh cars as recently as September 2015, are piling up, according to a survey published Thursday by German car dealer association ZDK. The poll assumed an average price of 15,000 euros per car.
“The vehicles are hard to sell at the moment because customers are uncertain,” Thomas Peckruhn, vice president of the association, said in an emailed statement. “We need clear signals from government if and under what conditions these vehicles might be affected by driving bans.”
Price Decline
Car-company bosses and government officials reached a compromise deal earlier this month to lower pollution. They agreed on software updates instead of more costly hardware fixes that are sought by environmental groups. The measures have been criticized as a smack on the wrist for Germany’s largest industry, which is accused of making cars that pollute more on the road than under test conditions.
Reflecting weakening request, some twenty nine percent of diesel drivers in Germany said they’d attempt and sell their cars as soon as possible because of concerns about falling values as cities mull driving bans, according to a survey by market researcher Deutsche Automobil Treuhand. As a result of slow sales, seventy seven percent of dealers said they had cut prices, the ZDK said.
Pressure on used car prices, particularly such relatively youthfull vehicles, is expected to further intensify as a result of the automakers’ trade-in bonuses for outdated diesel vehicles, the DAT said. Volkswagen is suggesting as much as Ten,000 euros on cars with Euro-1 to -4 emissions standards. The bonus is paid only when customers exchange their old diesels for fresh cars, making “youthful” used ones less attractive.
As many as twenty percent of drivers, or 1.Three million car owners, could take up the manufacturers’ offers, according to consulting hard Oliver Wyman.
‘Fear’ Factor
The value of used diesel cars is an significant factor in the calculations for carmakers’ sizable fleet sales, and plunging prices could trigger writedowns in their lease portfolios. In Daimler’s case, half of its car sales are either financed or leased by its financial services unit. There are about six million diesel cars with the older Euro five emissions standard registered in Germany presently, according to the country’s Federal Transport Authority.
“The fresh ‘diesel fear’ among customers has significant consequences for car companies,” Cedric Perlewitz, head of automotive at Commerzbank, said in a report Thursday. “Carmakers need to significantly expedite their strategic shift to electrical cars.”