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Diesel ban in German cities will hit used car residual values

Read the full article on AM Online

AM Online reported on the landmark ruling by the Federal Administrative Court in Leipzig that the cities of Stuttgart and Duesseldorf could legally ban more polluting diesel from pollution-hit parts of the city.

Thomas Goettle, global head of automotive at PA Consulting Group, is quoted in the piece saying that the ruling would have a profound effect on the “attractiveness of owning a diesel” and would impact residual values which had so far remained stable.

He said that diesel cars “will fall even further in the eyes of consumers and the resale value for used diesel cars will also take a big hit.”

“In Germany, petrol cars have held steady at 56% of their retail value after three years and 15,000-20,000 km annually, while diesel has dropped from 56% Jan 2017 to 53% Nov 2017,” Thomas continues. “After this monumental court ruling, demand for current diesel engines in new cars will decline faster in Germany to below 30% market share in 2018.”

Thomas says that the move could also prompt a “complete withdrawal from diesel car manufacturing altogether”, adding: “Looking ahead, it could mean full power for mild and full hybrids and plug-in hybrids as well as preparing for full electric vehicles. From 2020 onwards, we could see entire fleets going fully electric.”

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