Renault chief says governments have ‘condemned’ diesel

Changing government policies over diesel have "condemned" the fuel by leaving car buyers afraid of feeling "trapped" with vehicles they cannot sell, the chief executive of Renault has warned.

Carlos Ghosn, who heads the global alliance of Renault, Nissan and Mitsubishi Motors, said on Monday that consumers buy cars based on price, running cost and resale value and "do not care" what engine their vehicles have.

“They use common sense. Governments decide to support diesel, then the consumer goes in that direction,” he told an audience in Paris on the eve of the Paris Motor Show.

“When governments give signals that it’s not good, they are going to stop incentives, stop using diesel cars in cities, consumers are saying ‘why should I buy diesel car to find myself trapped three to four years down the road with something that is a big investment’.”

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He added: “Diesel is condemned because policymakers have condemned diesel. That is it.”

Governments across Europe had incentivised diesel technology as a way of lowering CO2 emissions, because the fuel is about 20 per cent more efficient than petrol. But many have begun phasing out incentives, or proposed banning the fuel type outright, following concerns over inner-city air quality, an issue linked to nitrogen oxide (NOx) fumes from older diesel cars.

Concerns over the extent of diesel pollution were also raised by the 2015 Volkswagen scandal, when the carmaker admitted to selling 11m cars worldwide that emitted far higher levels of NOx on the road than in laboratory tests.

Paris wants to ban all diesel cars from the centre of the city as soon as 2024, while several cities in Germany have begun banning older diesel cars in their most polluted streets.

The public’s appetite for the fuel has also collapsed, with diesel’s market share falling from more than 50 per cent to about a third of sales.

Carmakers are planning to phase out diesel engines, with Nissan, Toyota and Fiat Chrysler all killing off diesel from passenger cars in the coming years.

Renault will halve the number of diesel cars it offers, Mr Ghosn said.

“We have to follow the technology but at the same time listen to political trends...because those trends will define which technologies will win,” he said.

In a barb at the mayor of Paris, Anne Hidalgo, he used her plans to ban diesel cars from the French capital as an example of the kind of policies condemning diesel and influencing consumer choices.

Mr Ghosn's comments come in the week that the European Parliament votes on tough new rules that will force the car industry to cut CO2 emissions by 2030.

While the industry wants a 20 per cent by the end of the next decade, some countries are pushing for a 30 per cent reduction, which would be much more difficult to achieve.

Carmakers already have to reduce CO2 emissions by 2020 or face significant fines, a goal that is spurring the launch of electric cars across Europe over the next two years. – Copyright The Financial Times Limited 2018