A report from the Financial Times says that Fiat Chrysler Automobiles (FCA) will cease using diesel engines in majority of its passenger cars by 2022. This became apparent with Fiat’s 4 year strategy, which states that diesel fuel will be “phased out” from their cars.
This plan, which will be publicly released on June 1, is the latest version of the same program that was provided to investors back in 2014. While FCA has not made any public announcements about this yet, the report does indicate diesel fuel will still be used on their pickups and commercial vehicle lines.
Unaffected Vehicle Line
The 3.0L turbo diesel inline 4, used by the Ram ProMaster, and the 6.7L Cummins found on most Ram pickups will still be used. It is worth noting that Fiat doesn’t sell a lot of diesel cars in the US so there won’t be any effect on the domestic market. This is something that a Fist representative has confirmed, stating the US diesel vehicle line will remain intact.
The decision to drop diesel engines did not come as a surprise to industry observers. Since January 2017, FCA has been facing a federal investigation for allegedly using emission evading programs on their Jeep and Ram vehicles. This was followed in May 2017 by a civil lawsuit filed by the Justice Department.
Aside from these, FCA also faces another class action suit. The suit alleges that Fiat used emissions cheating programs that allowed 13,000 Jeep and Ram vehicles to pass EPA tests illegally.
These lawsuits is similar to what other automotive manufacturers are dealing with. Volkswagen, Ford and Mercedes-Benz are all facing similar investigations. Industry observers believe that the pressure led VW to implement electric powertrains.
Looking at the Future
However it is not just the lawsuits that have led FCA to drop diesel. It is a combination of cost cutting, meeting regulations and lower consumer demand. There is also a rising demand for hybrid vehicles, electric cars and plug in vehicles.
Aside from growing consumer interest, development of these vehicles makes it easier for automakers to go green and meet environmental regulations. The technological costs have also gone down, and that makes it attractive for both FCA and consumers.
Diesel has long been associated with pollution, and the image of vehicles spewing dark smoke is well known. By developing hybrid vehicles, it becomes easier for Fiat to follow regulations.
And as pointed out earlier, Fiat is not completely dropping diesel from its lineup. The Ram line will still use diesel for its pickups, so the division’s profitability will not be affected. The plan also doesn’t include commercial pickup trucks, and this is understandable as truckers need low end torque and power these engines have.
GM and Ford are doing the same thing, selling pickups with diesel engines, and Fiat is following suit. The decision to drop the diesel engine from cars make sense since the demand for it is not that strong. As marketing analysts have pointed out, marketing diesel powered cars is a tough sell.
Falling Demand and Rising Costs
It is these factors, along with increasing production costs and failing demand that influenced the company’s decision. While much of the focus is in the US market, demand for diesel powered cars in Europe has fallen too. Usage and demand fell in Europe by 8% in 2017.
The drop in demand comes at a time when several European cities are considering banning diesel cars as the engines have not proven to be clean as claimed. The notable exception is Italy, the home market of Fiat. In contrast with the other countries, demand for diesel cars due to the country’s lack of clear policy towards diesel engines.
That is the reason why Fiat still plans to sell diesel powered cars in Europe. There is also no question the troubles of VW has affected the future of diesel passenger cars however, so there is no telling how long Fiat will be able to market them. Whatever the case may be for diesel cars, the demand for diesel powered trucks is still there on both sides of the continent.
Even so, some companies are still trying to lure consumers diesel powered cars. The Chevy Cruze for instance, has 47 mpg on the highway and 31 mpg driving in the city. That being said, the sales of the Cruze have been on the low end. It also remains to be seen whether GM’s Chevy Equinox diesel will gain ground either.
For these reasons, it’s easy to see why Fiat is focused on reducing the cost of electric and hybrid cars.
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