The Financial Times is reporting that Fiat Chrysler Automobiles (FCA) will kill diesel from its entire portfolio of group brand vehicles by 2022. The report cites increasing costs and a drop in demand for diesel models as the key reasons behind this decision. While the report does not quote FCA directly, it does also point to an internal decision that will be made public in a 4 year plan on the 1st of June 2018. The Italian-American conglomerate is made up of Fiat, Alfa Romeo, Ferrari, Lancia, Maserati, Chrysler, Dodge, Ram, and Jeep. Jeep in particular has had a healthy diesel portfolio besides Fiat and Lancia. The fallout of the 2015 Volkswagen diesel scandal continues to haunt the automobile industry. Decisions like FCA's is a direct result of that, as sales of diesel models have started to decline sharply in some markets. Policy and political backlash against diesel in many regions of the world are also dictating a shift back to petrol in many diesel-heavy markets. Toyota has also announced that it will not be actively engaging in developing diesel-specific models in the future. aLast week VW Group company Porsche has also announced a complete move away from diesel. The idea of no longer investing in diesel is not restricted to the VW-scandal led disenchantment of diesel. It also comes at a time when most brands simply have to invest heavily towards electrification of their range of vehicles. Diesel car sales have dropped 8 per cent in 2017, meaning that for the first time in years, the oil-burners have a European market share below 50 per cent (43.8 per cent). FT says the cost of developing new diesel engines will be 20 per cent higher going ahead, than today's costs. And the cost of developing electrics is beginning to decline sharply.
While all FCA brands will move away from diesel, Fiat's commercial vehicles division (and also a select few models from pickup brand Ram) will continue making diesel engines for non-personal use. Ironically the Italian market which is home to Fiat and commands its highest European sales - saw diesel sales rise last year. And so unlike the industry, FCA's own diesel sales actually grew in 2017 - albeit marginally to 40.6 per cent of total sales. In India, FCA has been dominant on the diesel side - with Fiat's multijet diesel powering Tata, GM, Maruti Suzuki cars - besides Fiat and Jeep models. A move away from diesel in India may also be a politically led one, rather than actual market demand - which has declined primarily in Tier One markets, while remaining strong elsewhere. NDTV has requested FCA India to comment on the developments, and we await its response at the time of publishing this article .
