VW scandal threatens all diesels in US

Continental Exec Says China And Japan Could Also Be Affected

Last fall, automotive supplier Bosch said light-duty diesel vehicle demand would remain strong despite the then-nascent Volkswagen diesel-emissions scandal. Fellow supplier Continental begs to differ. The company, which made its bones in the tire industry but has since expanded its scope, says diesel demand in regions such as North America, China and Japan may shrink substantially, Reuters says, citing comments Continental executive Elmar Degenhart made to German publication Börsen-Zeitung last week.

The key is that, while diesels account for about half of Europe's light-duty vehicle market, oil burners make up between one percent and three percent of new vehicle sales in North America, China and Japan. That means any momentum Volkswagen and other vehicles makers have made peddling diesels as a way to boost fuel economy may more easily be wrecked by the scandal than in the established European market.

While Continental is a VW supplier, the company isn't aware of any potential legal probes into its operations. Meanwhile, Degenhart, whose company last year discontinued a battery-making partnership with South Korea's SK Innovation, says electrified powertrains and hydrogen fuel-cell vehicles are more likely to have better future sales than diesels.

As for Bosch, the US Department of Justice last November started investigating that VW supplier over any role the company may have had in the scandal, in which VW equipped about 11 million 2.0-liter diesel vehicles with software designed to cheat emissions-testing systems. The prior month, Bosch toed the proverbial party line, saying that diesel-vehicle demand hadn't fallen since the scandal started in September.

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