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Car sales slumped in late 2018 amid concerns over diesel, climate report

Finland's main automotive sector group, the AKL, says that a target of nearly a half million fully electric cars on the country's roads by 2030 is unrealistic.

Autoja kaupassa.
"Sales hit a wall in early December," says one car dealer from northern Finland. Image: Nella Nuora / Yle

Car sales went well during the first half of 2018 in Finland, but came to a near-standstill toward the end of the year, says Pekka Rissa, managing director of the Finnish Central Organisation for Motor Trades and Repairs (AKL).

"Consumers were confused by the debate over car taxes as well as by statements in a Transport Ministry climate report, among other issues," he says.

Adding to consumer confusion, says Rissa, was the adoption of the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) for measuring emissions.

According to Statistics Finland, just over 6,000 new private cars were registered in December, down by nearly 24 percent from a year earlier.

"Sales were still good in October, but in November and December consumers became cautious. The business hit a wall in early December," says Miikka Mustonen, head of the Koillismaan Auto car dealership in Kuusamo, north-eastern Finland.

Mustonen says that news of diesel cars being banned in some European cities spurred some customers to think again about buying one – as did last year's rise in the price of diesel to about the same level as that of standard petrol.

In mid-December, a European court ruled that the EU’s decision to relax diesel emission rules two years earlier was illegal, upholding a complaint brought by the cities of Brussels, Madrid and Paris over pollution concerns. Meanwhile diesel sales have tanked in Germany as the vehicles have been banned from some cities and motorways following the emissions-fixing scandal involving several of the country's carmakers.

'No need to ban diesels'

"Many car buyers in Finland also decided to wait for lower new-car taxes that took effect at the beginning of this year," says Mustonen, adding that he expects this to be a good year for the auto trade.

Rissa seeks to reassure prospective car buyers by arguing that a variety of engine technologies will still be in use in Finland around 2025-2030. He does not believe that there will be a rapid shift toward electric vehicles, as there has been in neighbouring Norway – where nearly a third of new cars are now fully electric.

"There are low-emission petrol cars on the market, very low-emission diesels, but also an increasing number of plug-in hybrids and fully electric cars, which will begin to play a stronger role after 2025," Rissa predicts.

"Drivers may be worried about the future value of a diesel car, for instance. A car bought now will be middle-aged in 2030 and will certainly retain its trade-in value," he claims.

In Rissa's view, there is no need to ban diesel cars in Finland.

"For instance, they can use biodiesel, which is practically carbon-free," he suggests.

Car dealer Mustonen is also trying to encourage potential diesel buyers.

"Especially in areas like this with long distances, diesel will be a viable alternative for years to come. There will be plenty of fuel," Mustonen says.

Koillismaan Auto customer Tauno Koski does not believe that maintenance of fully electric or even hybrid cars will be fully operational in the next few years.

"And how does the hybrid and electric car battery technology work in northerly conditions? Not necessarily well," says Koski.

Ministry report raises questions

Rissa of the auto sector lobby notes that a Transport Ministry report released in September made people wonder about the future of driving. Entitled 'Carbon-free transport by 2045 – Paths to an emission-free future,' the white paper laid out alternative scenarios aimed at eliminating transport emissions, including a transition to the use of electric cars and shared transport.

Rissa, who takes a critical view of the report, points out that it is a working group's proposal rather than government policy. He asserts that a target of nearly half a million fully electric cars in Finland by 2030, as suggested in the report, is not realistic. Last year fewer than 1,000 new electric cars were sold in Finland, according to the Transport and Communications Agency Traficom (formerly Trafi).

Yle, Reuters, Autotie

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