With Europe Around Its Neck, The Mighty Volkswagen Slows Down

by Bertel Schmitt

Published: May 12th, 2012

with europe around its neck the mighty volkswagen slows down

Yesterday, Volkswagen sent out a gushing report, saying that group deliveries rose 6 percent in April and 8.6 percent January to April. Something smells in Wolfsburg. Let’s take a look.

Europe, Volkswagen’s largest market by far, is beginning to be a big drag on the German juggernaut. In March, group sales in Europe were still up a bit. When the European manufacturers association ACEA reports its April data in the coming week, Volkswagen will have a big minus in front of its sales data.

Volkswagen’s press release hides this fact, it only cites a 1.6 percent gain for all of Europe in the first four months and gives no data for April. Usually, this type of selective reporting is a warning sign. However Volkswagen has reported that way for a while.

With a little digging in the archives and spreadsheet work, the following picture emerges. The blue numbers are calculated from archival data, the black numbers are as reported by Volkswagen AG.

4M’124M’11YoYApr ’12Apr ’11YoYTotal2,890,0002,660,0008.6%732,000690,8006.0%Europe1,250,0001,230,0001.6%313,000321,700-2.7%WEUR ex D661,400703,000-5.9%154,300171,100-9.8%EEUR205,100155,30032.1%57,70046,20024.9%China858,900741,20015.9%225,000192,70016.8%USA173,700131,50032.1%49,30038,70027.4%South Am296,900295,3000.5%67,50074,400-9.3%

April was a mixed month for Volkswagen, and the bad most likely will get worse. The times of double-digit growth rates seem to be over for a while. Volkswagen sales in Europe appear to be down by 2.7 percent in April, with Western Europe (ex Germany) down nearly 10 percent. South America also took a 9.3 percent hit. The negative numbers are offset by strong deliveries in China, up 16.8 percent and the U.S., up 27.4 percent in April. With nearly half of VW’s sales in Europe, it takes a lot of pumping in other markets to keep the ship from taking on water. Even if Volkswagen goes into minus territory, it will be far from sinking. Any hopes of becoming the number one automaker or even remaining in the number 2 position are quickly fading.

Now imagine how other European makers will perform that don’t have the global cushion Volkswagen has. Bad news for Opel, PSA, Fiat and Renault.

#April2012 #BertelSchmitt #Europe #Germany #Sales #Volkswagen

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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Herb on May 12, 2012

Western Europe certainly is and will be no growth market, given the debt-ridden infrastructure here. For wasting and wasted governments the standard means in such situations is to raise the taxes on those who can't run away, combined with introducing freely invented new fees on them or raising the existing ones. With an average unemployment figure of well above 10%, with an 50% unemployed rate among young people in Spain or Greece for example, Italy and France being only slightly better in this area, I would not expect any growth on the car sector in Western Europe in the near future. So, Volkswagen showing 1.6% growth in this shattered market may even "exceed analysts' expectations".

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- Tparkit on May 12, 2012
  
  Yup - the debt party is over, and we are headed into a global financial meltdown. In many areas it will be accompanied by political chaos and violence. It will last many decades, and the poverty in western nations that thought themselves golden will be stunning to our entitled generations.
  
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- Highdesertcat on May 12, 2012
  
  @tparkit I agree we have some dire financial times ahead. Not only for America but for much of the industrial nations as well. It won't affect the 'haves' as much as it will affect the 'have-nots' but for all the cost of milk and bread, and everything else, will rise to levels never seen before. Not even during the Great Depression. We have already seen what the teetering US economy did to the rest of the industrial world during 2008/2009/2010 and it only re-affirms that when America's economy has a cold, the rest of the planet has pneumonia.
  
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Forraymond on May 12, 2012

Isn't VW #2 or #3? Toyota and General Motors have mightier sales numbers, Europe or no Europe?

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