By on October 5, 2012

Volkswagen workers who make the Passat at the Emden factory in Germany are enjoying a mini-vacation. After the national holiday last Wednesday, which celebrated the fall of the wall and the re-unification, Volkswagen workers can celebrate falling sales of the Passat, and stay at home, says Germany’s Handelsblatt. Meanwhile, managers at Volkswagen are busy down–revising their production plans.

Passat sales are suffering from lagging fleet sales. Companies are postponing or canceling purchases in an attempt to ride out the European bust. Golf production on the other hand continues at double time. Volkswagen is sitting on a nice cushion of Golf Mk VII pre-orders.’ At the same time, production of the previous generation Golf continues.

“Until the end of the year, we build the old generation in parallel to the new model,” Volkswagen works council chief Bernd Osterloh told the Handelsblatt. “With that, we can fight the battle of the discounts without burdening the new Golf.”

August Production and Full Year Forecast
8M ’12 8M ’11 YoY Proj ’12
Toyota 6,904,333 4,757,211 45.1% 10,356,000
GM 6,421,000 6,303,000 1.9% 9,632,000
Volkswagen 5,910,000 5,360,000 10.3% 8,865,000
Black: Company data. Blue: Projection, based on last available
Toyota, GM: Production. VW: Deliveries. Forecast by TTAC

Nevertheless, Volkswagen will down-revise its production plan for the current year “by 140,000 units at the maximum,” Osterloh said. What the actual production plan number was and what it will be is anybody’s guess, The Handelsblatt thinks the old number was 9.7 million units for the current year, and the new number is 9.4 million. We think that the Handelsblatt is dreaming. According to a straight line projection of global sales through August, Volkswagen should end the year at around 8.9 million units, the downturn in Europe and at home in Germany could send the number lower, a Japanese windfall in China could lift it a bit.

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6 Comments on “Volkswagen Hits The Brakes In Europe...”


  • avatar
    Fusion

    Is your projection really just calculated by taking the first 8 month, dividing by 8 and multiplying with 12? Seems a bit too simplified for me, seeing how sales usually do pick up quite a bit towards the end of the year.

    I believe a more sensible way would be to take the relative increase from the first 8 month and then apply those to last years “overall” number – which would lead to projected VW sales of 9.12 million. Add the fact that the european markets have been performing below expectations, and the Porsche sales (not in last years numbers, but in this years) – and those Handelsblatt numbers don’t sound as ridiculous anymore. They still do sound high. ;)

    • 0 avatar

      These are global numbers, and as that, there is little or no seasonality in the total. Porsche sales are only recognized from August on out and won’t move the needle much.

      • 0 avatar
        Fusion

        At least with VW – that is just not true. VW group sales usually get stronger at the end of the year. In 2010 and 2011, sales from september-december were 35-36% of the years total, not 33% as they would be without any seasonality. 2-3% might not seem much, but on a base of 8-9 million, those are ~200.000 sales right there. Then you can add 10/12s of MAN sales (since only Nov-Dec were consolidated last year) and 5/12s of porsche sales for 2012 – which is another ~130k vehicles from MAN and 60k cars from Porsche. And suddenly, those Handelsblatt numbers don’t seem all that “dreamy”. (As I said, they still seem too high, but not by as much).

  • avatar
    MarkP

    What advice would Jonathan Browning give to the government of Germany to solve this problem?

  • avatar
    Lampredi

    The current Passat is now a veteran in the market, it was launched in 2005 and is now 7 years old. If it weren’t for the VW badge, Passat sales would have been nose-diving, even if there were no European crisis.

  • avatar
    Wheatridger

    Dang it- why do they show us the Passat wagon that we can’t buy here in the US?


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