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SEMA eNews, Vol. 9, No. 23 – June 7, 2006

VW PUTS DIESEL CARS ON HOLD

Volkswagen of America has decided to discontinue production of the diesel versions of its Jetta, Golf and Beetle models due to new federal emissions standards that will take effect this fall.

The new standards have put even more stringent limits for nitrogen oxide emissions, and may significantly dampen VW’s sales. Volkswagen has promoted its diesel engines as a way to combat rising gas prices, and in fact diesel sales have helped to increase U.S. sales for VW by 20.4% in 2006. Diesels actually accounted for 22.7% of VW’s U.S. sales during the first four months of 2006, which is nearly twice its traditional 12%.

Volkswagen will, however, offer a diesel version of the 2007 Touareg, and plans to build extra 2006 Jettas, which it hopes to sell well into next year. A new version of the diesel Jetta, which will meet emissions standards in all 50 states, should be available for the 2008 model year.

THIS MATTERS TO YOU BECAUSE…

Despite VW dropping its diesel cars for 2007 model year, 2008 will see the return of a diesel Jetta in all 50 states, including California, which is the biggest state in terms of vehicle registrations.
DaimlerChrysler also plans to stop production of its diesel version of the Jeep Liberty due to its inability to meet the new emission standards as well.
The diesel engine performance parts market is still a strong market for the specialty-equipment industry. Growth in light-truck diesel engine parts is expected to continue to grow, and the overall diesel light-truck market is expected to about 600,000 sold in 2005 to 1,000,000 in 2009.

Source: “VW to drop 3 diesel models for ‘07," www.freep.com.