Car giants defend diesel as Geneva motor show opens

The future of diesel cars overshadowed all the gleaming new metal unveiled on the opening day of the Geneva motor show. On the eve of show Toyota had announced it was ending production of diesel passenger cars for Europe.

The move forced other car giants to come out in diesel’s defence, dismissing talk of the death of diesel.

Mercedes-Benz head of research and development Ole Kallenius told The Irish Times: "We believe diesel has a bright future." He said the key would be technological developments that will help lower emissions from these engines and ease concerns over air pollution.

Over at VW Group, the firm that triggered the current backlash against diesel after admitting to cheating on US emissions tests, chief executive Matthias Mueller said: "I'm firmly convinced that diesel will experience a revival." His hope, it seems, is based on the latest diesel engines proving to be able to meet strict new emissions standards and persuade legislators to abandon plans for sweeping bans on diesel cars.

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Toyota ‘crazy’

Addressing the impact of Toyota's decision in the Republic, John Donegan, Skoda Ireland brand director said: "I think it's crazy. I don't think diesel is dead and there are not enough incentives in place in to support consumers making such a big move so quickly. Diesel and petrol has played such a big part in the Irish motoring psyche that it is going to take some time for us to evolve towards hybrid and electric. It's not something that is going to work overnight.

“I think [the announcement] suits Toyota’s agenda but not the Irish motoring public.”

On a European level, with billions of euro at play, getting this strategy wrong would prove very costly – even fatal – for some brands.

It was hardly surprising to hear PSA Peugeot Citroën Opel boss Carlos Tavares say: "The world is in chaos." He was referring to a more immediate threat, however: the potential tariffs on imported cars being mooted by US president Donald Trump.

While there are no signs of other mainstream car brands following Toyota’s lead in abandoning diesels, tougher EU emission targets taking effect by 2021 are forcing many to reconsider their model line-ups at the very least. And it’s just one of the headaches facing car industry executives. Alongside the uncertainty over diesel’s future, the advent of driverless cars and future car ownership models is causing massive disruption and uncertainty in the auto industry.

Admittedly some premium German brands are resourced to face up to the challenges ahead. Between 2016 and 2017, Mercedes Benz spent €16 billion on research and development. According a report from PwC, VW Group spent €9.75 billion on R&D last year.

Yet even with billions to invest in new technology, another issue is causing problems for some brands: Brexit.

Jaguar Land Rover (JLR) used the Geneva show to introduce its upcoming all-electric crossover, the I-Pace. The car will be built in Austria, under contract by Magna Steyr, but JLR voiced serious concerns over Brexit at the show, saying it needed much more clarity from the British government before it could make a decision as to where it committed investment cash for a whole family of electric cars.

"That makes the decision this year very, very critical and I don't know whether we can make it," JLR's chief executive Ralf Speth said in an interview at the show.