Volkswagen Not Sure it Will Bring Diesel Cars Back to US Market – Wall Street Journal

Posted: Wednesday, September 14, 2016

Volkswagen remains in talks with regulators about fixes for certain diesel models it sold in the U.S. for several years that were equipped with software allowing it to cheat on emissions tests.
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The head of Volkswagen AG
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’s North American operations indicated the German auto maker is uncertain when or if it will bring diesel engines back to the U.S. car and light-truck market.

Hinrich Woebcken said on Monday U.S. emissions regulations are tightening, making it more difficult for light-vehicle diesel engines to legally meet requirements. For now, the company will focus on gasoline-powered vehicles and a gradual roll out of hybrid-electric and all electric cars.

The company isn’t selling diesel-powered vehicles in the wake of its high-profile emissions scandal, which became public nearly a year ago. Mr. Woebcken said sales of non-diesels have exceeded Volkswagen’s expectations, even though it has lost U.S. market share due to the company’s reliance on diesels that are no longer sold here.

He said the company will evaluate the potential for a return of its diesel vehicles to the U.S. on a “product by product and package by package” basis. The technology, which requires extensive and costly treatment to meet emissions standards, remains popular in Europe, he said.

Volkswagen’s 1.8% market share through August compares to the 2.1% it achieved through the same eight-month period in 2015, according to market researcher Autodata Corp. Autodata estimates Volkswagen’s incentive spending increased 31% on its passenger cars through August compared with the same period last year, while light-truck incentive spending crept up 10%.

The wider U.S. auto industry has become more dependent on sales incentives as retail growth has cooled in 2016. Diesel-powered cars as a percentage of light vehicles sold in the U.S. has plummeted amid Volkswagen’s pullback, according to WardsAuto.com.

Volkswagen remains in talks with regulators about fixes for certain diesel models it sold in the U.S. for several years that were equipped with software allowing it to cheat on emissions tests. The company has agreed to pay up to roughly $15 billion to remedy the situation.

Write to John D. Stoll at john.stoll@wsj.com

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