pontin rupert

It seems only yesterday that diesel propulsion was hailed as the saviour to the economy and the best way forward to reduce pollution and motoring costs at the same time.

Petrol power was destined to slide in popularity and some predicted that diesel power was set to take up to 70% of registrations each year.

To be fair the push for diesel seemed to have been founded on solid research. The benefit to users offered by the decrease in fuel consumption outweighed the noisier engines and, in the early days, more sluggish performance that was only achieved in a reduced power band, making these less user friendly to drive.

As the years passed, the split in volume of petrol to diesel rapidly increased and it was not long before diesel sales were in excess of 50% of total registrations. Manufacturers put a great deal of effort into developing new and cleaner technology that made driving these cars much more engaging and acceptable when compared to their petrol competitors.

Each year, more stringent limits have been put on emissions. In addition, the huge company/business car market has been robustly driven by CO2 ratings, seeking to make diesels cleaner and reduce pollution.

These measures, centred around personal taxation, have been in place for some years and even privately owned cars have paid VED on the same CO2 basis.

Significant success

Manufacturers took diesel propulsion to the forefront of sport too, in a bid to gain acceptance, drive demand and test advances in combustion and emission technology. They met with significant success in various motorsport categories, not least the recently run Le Mans 24 hours, in which the highest positions have been dominated by diesel powered vehicles for many years prior to 2015.

Let us also be clear that diesel power is the driving force behind our significant business fleets; from a company business car driver to the LCV fleets and, of course, the vital HCV fleets that drive goods and products millions of miles around the UK each year. Manufacturers and UK businesses have striven to ensure that they have the latest, cleanest models on the road for running cost and driver satisfaction, with consideration given to the environment.  That said, price has been and will continue to be a major contributing factor.

Despite the significant swing towards diesel, the picture is beginning to change with the surge in Alternative Fuel Vehicles (AFV) registrations; a topic in its own right that has often been widely commented on. What is clear from the 2015 data year-to-date is that the increase in AFV registrations is predominantly at the expense of the diesel engine. By the end of 2014 diesel registrations accounted for 50.10% of the total market against 47.80% for petrol registrations and 2.10% AFV registrations. By the end of May 2015 diesel registrations accounted for 48.4% of the market against 48.9% for petrol and 2.8% for AFVs.

The suggestion here is that, with the extensive press coverage given to the harmful effects of NOX from diesel engines, the buying public is starting to move away from a technology and propulsion that has been, and at present still is, dominant in the UK and many other European countries.

One must also consider that it is possible that this may not be the right move and that it may be more appropriate to take a more considered view of diesel as a whole. There should be focus on the advantages of the latest cleaner technology and a strategy to move customers to newer vehicles in a cost effective manner.

However, there seems little doubt that older diesel technology is not appropriate for widespread use going forward, specifically in urban areas. This is the area that the government needs to focus on to help meet the European pollution limits.

The most dangerous

There seems to be a limited number of ways to get the message across and taxation is the simplest. It enables focus to be given geographically on cities and areas where NOX emissions have been proven to be most dangerous and the key here is to ensure that whatever restrictions are put in place they need to be fair and measured.

The government needs to be mindful that there are a significant number of people that bought diesels because they were encouraged to do so. There are also thousands of businesses that are reliant on older diesel powered LCVs and HCVs to be able to do business. In fact, our economy is in part reliant on these businesses being able to deliver goods or perform duties at a certain price point.

Many drivers and businesses are just not in a financial position to be able to replace their old diesels at the drop of a hat. Nor are they in a position to be able to suddenly pay a penalty for using their car in an urban area and will not be able to cope with the changes that may be forced upon them in these circumstances. The cost of services and repairs provided by smaller companies with older CV fleets will also have to increase if all the vehicles need to be replaced and this will have a negative impact on the local and national economy. This is a position that requires delicate handling.

However morally correct it may be to swiftly change the type of propulsion of our private and commercial vehicles, care must be taken as to how this transition takes place. Equally as a nation we must not automatically condemn diesel but we must look at how we use these vehicles and contemplate how to move drivers into newer less polluting models in a controlled and financially achievable time period.

In summary, the government has a potentially expensive problem that needs to be resolved. The expense will not stop at the Treasury as thousands of private and commercial diesel vehicle owners will also be negatively impacted. It is therefore important that any measures are properly assessed and are not overly punitive, bearing in mind the overall position of the economy and the consumer.

Rupert Pontin is Head of Valuations at Glass’s