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FULL ARTICLE | EDITORIAL 
Truckloads of cash to avoid dreaded city diesel ban 
Peter Schmidt | Editor

Published: Fri, 18th August 2017 12:50:15 GMT
 

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Open quote signThere’s a chill wind blowing in Europe’s diesel car market. With signs that Europe’s limp diesel car balloon is sinking fast, potentially heading for an extra hard landing, Germany’s diesel segment-dominating carmakers are left with no option but to act fast. The familiar safe track out of the mire, government assistance, can be ruled out because Germany is about to stage its parliamentary election. 

Today’s Merkel government, already accused of cosying up to an industry tarred by a reputation for pollution and cheating, must keep its relations with the industry at arms’ length. 

At least during the pre-election period. 

That’s chiefly because Germany’s motorists are already in an ugly mood. 

And none more so than diesel car owners.

The last time Germany’s government assisted its carmakers big time was back in early 2009. 

Intended to help the industry at a time of plummeting new car sales in much of Europe, Germany’s government paid €2,500 to anyone willing to scrap a car 9-years old or older in an exchange for a new one. 

The take-up rate exceeded most expectations. 

Expressed in numbers, Germany’s 2009 car market ballooned to 3.8m cars; the country’s second-best car sales on record, beating 2008 sales by close on three-quarter of a million units. 

The not so good news - again the autoindustry was bailed out by Germany’s taxpayers. 

Not this time.

That Germany’s autoindustry is in trouble once more is not in question. 

Why it should be in such a predicament is another more important matter. 

The toxic fallout from the dieselgate affair is such that Germany’s diesel car owners, still responsible for nearly one-in-two sales last year, are likely to stampede into a lemming-like mass disappearance act. 

And who can blame them? 

For Germany’s innocent diesel car owners today’s diesel exhaust emission drama, centred on their cars’ real-world NOx emissions, has turned ugly.

With rumours and threats of looming discriminatory diesel bans in cities, there is one further issue that seemed destined to finally break the camel’s back. 

Foremost, that’s rumours of impending steep rates of diesel car depreciations. 

To avoid a sudden and deeply damaging meltdown of Germany’s and Europe’s massive diesel car market, the industry has had to act, fast!

Today, Germany’s carmakers are offering huge wads of cash to anyone wishing to scrap a high-polluting old diesel in exchange for an environmentally much cleaner new car.

The extent of the offered financial incentives is unparalleled. Buyers of a new VW Golf, trading in the obligatory old diesel, will at least get a €5,000 discount. 

Those opting for an electric, plug-in hybrid of even a natural gas powered Golf, will still get a great deal more. 

With all of Germany’s carmakers already offering these massive new-for-old discounts and Toyota already on board, only yesterday France’s PSA joined with its own scheme, handing out discounts of up to €7,000. 

Germany’s consumers, renowned for their ability to spot and react to real bargains, are likely to jump at these offers in droves. 

In consequence, in a re-enactment of 2009’s car scrappage incentive boom, likelihood now is that during the remaining third of this year Germany’s new car sales could go through the roof. 

That’s because anxious owners of old diesel cars will see this as a godsend to offload a potentially fast depreciating asset for a hugely subsidised and more future-proof set of brand-new wheels. 

Many of these cars will be bought in advance, causing a likely sales famine early next year.
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