DEF shortage puts more nails in diesel car, SUV coffin

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DEF shortage puts more nails in diesel car, SUV coffin

The diesel exhaust fluid (DEF) shortage is accelerating a decline in the popularity of passenger cars and SUVs running on diesel.  
The headlines about the DEF shortage, caused by China's restrictions on exports of urea, have focused on commercial vehicles like cargo trucks because they need more frequent refills of the fluid due to their longer drives and heavy loads. 
Ordinary cars don't need as much, but the headlines have still scared potential customers away from diesel models. 
“One of my customers asked for a car that was suitable for camping, so I suggested a diesel SUV, particularly for its fuel efficiency,” said Mr. Kim, an owner of a car dealership in Seoul.  
“But over the weekend, the customers called me to change the order from a diesel model to another type that doesn’t need DEF. Unlike commercial vehicles, SUVs can run more than 10,000 kilometers on just 10 liters of the fluid, but I don’t think that fact will make him change his mind.”
Diesel cars in Korea have already seen a decline in popularity, mirroring the rise in interest in eco-friendly cars such as hybrids or pure electric vehicles (EVs).
Newly registered diesel models in Korea in October numbered 20,261, a 63.1 percent decline from a year earlier, according to data from CarIsYou, a Seoul-based market tracker of auto sales.  
In September, the figure saw a more modest 23.4 percent decline.  
For the first ten months of this year, the market share for diesel models among new car sales was 25.4 percent. But in October alone, the market share was only 16.5 percent.  
“With the rising price of fuel and a trend towards eco-friendly vehicles, the DEF shortage is leading consumers to purchase hybrid vehicles instead of diesels,” said a spokesperson for CarIsYou.  
Sales of hybrid vehicles jumped 20.3 percent in October, from 15,875 units last October to 19,182 units.  
Carmakers are stopping production of many diesel models.  
Genesis, Hyundai Motor Group's luxury brand, announced recently that it will stop launches of new internal combustion engine vehicles from 2025. From 2030, it said it will stop selling them completely.  
Genesis stopped taking orders for its two diesel sedan models – the G70 and G80 – on Oct. 22.  
Production of diesel versions of compact SUVs such as Hyundai Motor’s Kona, SsangYong Motor’s Tivoli and Chevrolet’s Trax were suspended last year. The diesel version of Renault’s Captur SUV was suspended in March. Kia’s diesel Seltos SUV will also stop production next year.  
Diesel cars were popular for their fuel efficiency.  
In 2015, diesel models accounted for 52.5 percent of Korea’s auto market. Gasoline model had a market share of 37.2 percent at the time.  
“In 2015, when Volkswagen’s so-called ‘dieselgate’ scandal broke out, consumers started to think differently about diesel cars,” said Moon Hak-hoon, an automotive engineering professor at Osan University. "A lot of countries starting to come up with regulations on diesel cars."
Problems with diesel cars continue to this day.  
Early this month, the Ministry of Environment levied a fine on Mercedes-Benz Korea and Stellantis Korea for fabricating emissions from six of their diesel models.  
“With the breakout of the DEF shortage, consumers will continue to avoid diesel-running cars and their sales will continue to decline,” said Yoo Ji-woong, an analyst at eBest Investment & Securities.  
Sales of diesel cars will be replaced by hybrids and EVs.
In 2015, the market share for hybrid cars was 2.1 percent, which grew to 10.4 percent as of October. The market share for pure EVs went from 0.2 percent in 2015 to 5.5 percent this October.  

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