BERLIN, GERMANY — The ongoing “dieselgate” scandal is weighing heavily on the business of car dealerships in Germany, a study by the German Automotive Trust (DAT) showed on Tuesday.
According to the study, sales of used diesel vehicles in particular were still in free fall due to growing fears among customers that German cities could soon impose driving bans.
The “dieselbarometer” compiled by DAT showed that 87 percent of car dealers were only able to sell used diesel vehicles with significant discounts, while 22 percent thereof no longer accepted used diesel vehicles themselves as a means of payment.
The federal government in Berlin has admitted that at least 20 major cities in Germany will fail to comply with European Union clean air regulation by 2020 due to high Nitrogen Oxide (NOx) levels. According to the Federal Environmental Agency (UBA), diesel vehicles are the major source of NOx pollution which poses risks to human pulmonary health when inhaled.
In a recent landmark verdict, the German Federal Administrative Court ruled that municipal governments affected by high NOx levels have the right to impose driving bans on diesel vehicles as a last resort.
Car dealers polled by DAT said that the need to advise customers on sales and related cost had increased dramatically since the decision.
Furthermore, some 58 percent of respondents surveyed in the study indicated that they were selling fewer new diesel vehicles to commercial customers. Some 86 percent complained that both new and used diesel sales to private customers had declined.
DAT warned that car dealers consequently face a growing “diesel dilemma” which poses a significant threat to their business model. Whereas 61 percent of firms had begun to create financial reserves in anticipation of resulting losses, many were still likely to rely on “support from carmakers, importers and policymakers” to prevent them from sliding into insolvency.
The findings of DAT “Dieselbarometer” were derived from a representative survey among car dealers, complemented by data from the German Federal Motor Transport Authority.