By on May 12, 2012

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’12 4M’11 YoY Apr ’12 Apr ’11 YoY
Total 2,890,000 2,660,000 8.6% 732,000 690,800 6.0%
Europe 1,250,000 1,230,000 1.6% 313,000 321,700 -2.7%
WEUR ex D 661,400 703,000 -5.9% 154,300 171,100 -9.8%
EEUR 205,100 155,300 32.1% 57,700 46,200 24.9%
China 858,900 741,200 15.9% 225,000 192,700 16.8%
USA 173,700 131,500 32.1% 49,300 38,700 27.4%
South Am 296,900 295,300 0.5% 67,500 74,400 -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.

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8 Comments on “With Europe Around Its Neck, The Mighty Volkswagen Slows Down...”

  • avatar

    On South America…A large chunk of that is due to Brazil. Sales tanked 14% last month. Has to do with the rounding of the wagons against imports taking affect and ‘local’ makers taking advantage and putting prices up. Also, the guv is messing with the market by forcing the official banks to lower interests rates. So, consumers are holding back to see how it all shakes down.

    In other news, after trailing the Uno for the first quarter, the Gol is back on top. Lots of money on the hood though to get that bragging right…

  • avatar

    After our disastrous ownership experience with a 1982 VW Quantum, I’ve not been a fan of VW. But VW does fill a need for transportation for the masses which dates back to WWII.

    As such, it is sad to see VW, which tries so hard to be everything to everybody all the time, being dragged down by economic circumstances.

    Although I don’t care to ever own another VW product, I would much rather see VW succeed and proliferate than I would Government Motors, which is forever going to be sucking on the government teat, dragging down the tax payers, en masse.

  • avatar

    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”.

    • 0 avatar

      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.

      • 0 avatar

        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.

  • avatar

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

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