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