Although the current VW diesel scandal is likely to have put a dent in future diesel sales, BMW is apparently marching forward with their diesel strategy. Austrian media reports that BMW laid out plans for an expansion of the engine production at the Steyr plant. Trend magazine says BMW sees no reason for changing their investment plant which will kick off in 2016 and will cost around 90 million euros.
BMW also confirmed the assumption that the diesel scandal at Europe’s largest carmaker will not adversely affect their own sales figures. While diesel sales might drop in the U.S. market as a result of the scandal, the meat of the BMW diesel sales continues to be in Europe.
The BMW plant Steyr produces approximately 750,000 diesel engines per year, and the development and testing of new diesel engines takes place in Austria as well. BMW has been building engines for over 35 years at Steyr Motors – for a total of around one million per year.
For those who haven’t heard, Volkswagen AG is in quite a bit of trouble with the US Environmental Protection Agency for selling diesel cars that used a software-based defeat device to essentially turn pollution controls off. Volkswagen has stopped sales of the violating diesel-powered vehicles and could be fined up to $18 billion.
Volkswagen is one of the many brands that has been trying to erase the negative stigma behind diesel engines for decades. Diesel engines in America are thought to be dirty and inefficient and are seldom sold here in comparison to the rest of the world. It’s a stigma that we’ve created due to the poor quality of diesel engines of a bygone era. But the diesel engine has come around within the past decade or so, in the US. Several brands, even some American ones, have been selling diesel engines in small cars within the past couple of years.
Now, obviously, there is no evidence that Volkswagen’s latest diesel-gate scandal will hurt diesel sales in America. But it might, and that’s the issue that many automakers have to face now.