It was a lofty goal, a possibility at one point made believable by a sudden onslaught of seemingly indisputable evidence.
Volkswagen Of America determined that in 2018 the brand would generate 800,000 U.S. sales.
Indeed, between the industry’s doldrums in 2009 and 2012 the Volkswagen brand recorded a 104-percent improvement as U.S. auto sales rose by a far more modest 39 percent.
The task then seemed simple enough. After proving they could double their volume over the span of just three years, Volkswagen needed another doubling over the span that was twice as long. Which, it turns out, wasn’t to be so easy.
Long before the latest troubles struck – before a late-September diesel emissions scandal cut the automaker down at the knees, before the company’s U.S. CEO testified before a typically hostile congressional subcommittee, before it was known that the brand’s MY2016 diesel-powered cars wouldn’t be certified for sale – Volkswagen’s U.S. sales trend was beginning to veer away from the stated goal. As the market steadily improved, Volkswagen’s U.S. sales in 2013 slid seven percent, fell another 10 percent in 2014, and were down three percent through the first eight months of 2015.
Volkswagen wanted to sell 800,000 cars in America in 2018? In 2015, Volkswagen will only sell 350,000 if they’re struck by dumb luck, a stroke of serendipitous karma, and the kind of fortuitous bounce that would make Bubba Watson blush.
Granted, Volkswagen’s own bosses have long expressed their own doubts about the 800K goal. “We have to have realistic targets,” U.S. CEO Michael Horn said last year. Horn went on to clarify the accuracy of the vision, but questioned the timing.
Now, of course, we’re anticipating a severe downward swing in the numbers. While it’s true that gas-powered models accounted for the lion’s share of Volkswagen’s U.S. sales, the 2.0-liter TDI diesel was still fitted to approximately 53,000 of the vehicles Volkswagen sold in the U.S. in the first three-quarters of 2015.
Subtract those sales from the equation, even without the harm done to the brand’s image, and Volkswagen’s market share in the first nine months of this year would have stood at 1.6 percent — not the already disappointing 2.0 percent the brand actually achieved thus far — and that’s before you begin to calculate those sales going elsewhere.
With sales slightly south of flat through the first nine months of 2015 and the diesel issue causing only limited harm at the tail end of September, October’s results will more accurately project the outcome for the near future.
Yet even in a best case scenario, if Volkswagen maintained its sales pace across its lineup with the exception of a complete loss of diesel sales, the brand would likely record only 23,500 October sales, earning market share of only 1.7 percent, a decrease of a half percentage point, year-over-year.
In that best case October scenario, using those assumptions to project a full year’s worth of figures, Volkswagen would sell only 290,000 new vehicles in a calendar year.
True, those figures don’t take into account new product launches. A larger Tiguan, a proper midsize crossover, a refreshed Passat, a next-generation Jetta, a de-badged special edition Golf R SportWagen in brown with a 7-speed manual transmission inherited from the Golf’s Porsche 911 corporate cousin could, theoretically, all make a difference. Well, probably not that last one.
But those best case scenarios also fail to take into account the damage done to the whole Volkswagen product range. This is a company that wasn’t exactly currying large amounts of favour in the U.S. market, where Volkswagen’s market share is little more than half what Volkswagen manages north of the border in Canada; one-seventh of what Volkswagen earns south of the border in Mexico.
Math is hard. But we can do a little addition, multiplication, and subtraction when it’s absolutely required. Even if Volkswagen Of America doubles our best-case-scenario October projections in the next three years by completely flipping its sorely tarnished reputation on its head, they still won’t be selling 800,000 new vehicles per year.
Not even close.
Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.
I think this is the part where all the guys in the VW America office look at each other, say, “Gentlemen, it’s been a privelege working with you,” and then sing “Nearer my God to Thee” as the ship slowly succumbs to the sea.
It’ll take a LONG time for VW to claw its way back to where it was before the diesel crisis hit…and that’s a shame, because their gas powered stuff is good (great, in the Golf’s case).
Thing is, they totally fabricated the iceberg in this case!
Gotta wonder though: how many 2016 TDI models of any stripe actually made it into the U.S.? Could VW figure what they need to do to bring the cars into compliance (assuming none were), then apply for 2017 MY certification, badging TDIs as early 2017 models (complete with a DEF trailer permanently attached to the back and refilled at every third fuel-up, an EGR canister taking a third of the engine compartment (but thankfully only needs disassembly every two months regardless of mileage, and whose components can be cleaned in a household dishwasher), and a regen cycle that earns the average Passat a big-rig mpg figure while requiring a second deep-cycle battery which will drain each time the engine is shut off to finish the process; you think parking on a bed of leaves in October with a hot spark-ignition cat is cause to pull out the marshmallows ;-) )?
I guess I’m confused as to whether any 2016 TDIs DID make it here and possibly to dealers (depending on the 2016 certification timing), so B&B, set me right here. What would I (or could I) do (or could be doing) if I had scheduled to sign the papers on Saturday, September 19th, and drive my brand-spankin’ new TDI home!!! (I suppose folks who were to take delivery of 2015 leftovers would be in the same, if not even leakier, passenger liner, since the car is physically there! (Again, presuming that no 2016 TDIs were on the lots yet.)
“I guess I’m confused as to whether any 2016 TDIs DID make it here and possibly to dealers (depending on the 2016 certification timing), so B&B, set me right here.”
No 2016 2.0L TDIs were released for distribution. EPA refused to issue a Certificate of Conformity until VW provided a satisfactory explanation for emissions discrepancies in the ’09-15 models. After the confession, EPA declared the ’09-15 models out of conformity and tabled the application for the ’16 models. As far as I know, the ’16 models shipped to the US over the summer are still sitting in port storage.
That’s what I thought — thanks for clarifying.
If Mr. & Mrs. Josef Apfelstrudel were going to take delivery of a 20*15* TDI leftover from stock on the 19th, then, I presume they were screwed (along with anybody purchasing a CPO from a VW dealer), since I thought the stop-sale applied to those vehicles as well, and was immediate.
And I presume that as floorplanning goes, the dealers don’t owe anything for the cars in port, since they aren’t in their inventory, correct? (Much as I like to rag on VW and their dealers based on personal experience, as with anything, there are good dealers (and good people therein) who are caught in the middle here.)
Anybody who arranged to buy a 4-cylinder TDI and didn’t take delivery before the stop-sale is out of luck for the foreseeable future. They’ll have to wait around for whatever fix VW comes up with, or cancel the sale.
I would assume there is no floorplan cost for the ’16s since they never got into the system. VW announced they would pick up the costs for older TDIs that are now unsaleable.
You are making an assumption that the people who actually buy VWs care about any of this. None of my VW owning friends do. The 800K sales were highly unlikely (to say the least) without absolutely massive changes in their product lineup regardless. The Germans don’t seem to care enough about this market to make those changes.
@khodes1
US market as it stands is a pretty small market for Volkswagen. They are more concerned how the “cheating”. Has affected it’s overall Global market
I agree with you completely. What is happening in the US is a tempest in a teapot for them. Europe’s reaction is the important part. But how badly can the EU REALLY punish one of it’s most important exporters and employers? VW will fall on their sword, fire a bunch of people, pay some steepish fines, promise to never do it again, and carry on with life. Nobody really believes that the top management didn’t know, but I doubt there is a smoking gun to prove they did know. And even if they did know, water under the bridge. Winterkorn goes to jail or pays a fine – so what? He already got canned. You KNOW Piesch isn’t stupid enough to have anything that points to him – that dude could give lessons to Machiavelli!
The people on here talking about VW pulling out of the US or deserving to go under are simply idiots.
@krhodes1 – Agreed, in full.
“I want to get off VW’s Wild Ride!”
THE RIDE NEVER ENDS
I have a question for the best and brightest.
Which OEM stands to gain most from VW’s fall.
Right now I dont know.
Clearly, Mitsubishi NA /s.
Actually saw a brand, spanking-new Outlander Sport with Ohio temp tags whilst winding my way into work yesterday.
Had to do an honest-to-gosh double-take!
Was it white? I have only seen the new Outlander Sport in white.
Mitsubishi
The Word is Getting Around™
Mitsubishi
Advertise to the World Your Sub-700 Credit Score™
Chrysler
When u need a little more classy car then ur Galant™
Subaru would be the best answer, but they’re capacity-constrained as it is. So, in reality, a little bit of everyone and maybe the remaining Chevy Cruze diesels?
Presuming you are talking about the US, none of them.
The people who buy gas VWs currently will continue to do so (why wouldn’t they?), especially as I foresee some sweet incentives on the horizon. The people who want a new TDI will mostly just wait it out. Very few people need a new car TODAY, especially the practical sorts who want a new diesel VW. MAYBE the diesel Cruze picks up a few diesel Jetta intenders, but nobody interested in a long or short Golf or a Passat is likely to buy a Cruze.
Of course I’ve forgotten: is the new Cruze going to get a Diesel at some point? I thought Chevy was dropping it.
Last I read (before the VW scandal broke) was that the USDM Cruze will get a 1.6L diesel a year after the new model debuts.
Driving the Cruze made me want to check out a Verano, because moar engine.
The Cruze has not enough engine.
I think long term VW comes out Ok short term I would say their sales will fall on all models. While the vortex crowd will keep buying them the green crowd (which is a significant # of VW owners) and the I want something different then my Moms accord crowd may steer clear. The dealers near me seem to be piling on the discounts on Jettas and Passats (right now they are closing in on advertising 20% off sticker)even true car says i can get 17% off a passat. But yes I doubt they go under. We will need to wait until Nov to see if this plays out in reality.
They were discounting the heck out of them before the scandal broke. $99/mo lease deals on Jettas, as an example. Friend of mine got one, loves it.
Question is – is now the time to get a nice price on a new Golf or GTI?
Don’t know about manufacturers, but I expect car rental companies to benefit.
VW as a brand has a sport-compact image, so my candidates are Subaru and Kia.
Or an Elantra GT!
It’s increasingly clear that the huge new facility under construction for the local VW dealer is ill-timed. Perhaps they can make a little money by renting the showroom out for flea markets and such.
The local VW emporium should have been “flea circus!” Well, at least judging from the “service” my Mom’s Emm-Kay-Four 2000 Jetta received there!
Every single one of them must have washed out from the local fast-food joint!
They were even written about in not-so-complimentary terms by one of the big-three car rags (rhymes with “boater friend”) when the DCT in their long-term Jetta MkVII decided to schitt the bed whilst it was being driven between Pennsylvania (?) and La-La Land. They took forever, and “detailed” the car as a “favor,” except the car looked like utter crap when they were done with it! (Don’t remember — whatever they did may have even caused permanent damage to a trim part or two on the interior.)
(Of course, this was the same auto group whose Pontiac franchise dating back DECADES was yanked around two years before the brand was guillotined. I don’t think their Volvo franchise is much better.)
A flea market targeted at hipster VW buyers would actually be a good idea. Just make sure you call it a “craft fair”.
Something else about “funny cigarettes” comes to mind, but since I’ve gotten into lots of trouble elsewhere on this site today, I’ll let it slide.
‘Vintage clothes fair’ gets the hipsters worked up.
Problem is, VW has offended the wrong type of people. VW made their owners look like fools. We see years of VW advertising touting their cars as something the “right” people buy. Their buyers are trendy, their sales were increasing by going after hipsters, tree huggers, and fringe fasionistas. They sold their cars with flat out lies.
Now, any VW owner may not care, but they will care when they discover that all their fashion friends look down their noses and that their VW makes them feel like fools. Live by fashion – die by fashion. They will care when they find insulting notes on their cars. They will care when they realize that their VW car is ostracizing them from their Sierra Club friends at the recycling celebration.
Look what happened when GM admitted that they were putting Chevrolet engines in Oldsmobiles. The Olds owners were made to feel like fools. We’ve seen this before. The scenario will harm VW immensely.
Open a fashion/hipster environmental magazine like Outside, National Geographic or Green. Look at the VW ad. Read the print about how good their VW is going to make them feel around their fashion/hipster friends. I don’t even own a VW, but what VW says about their cars, what VW claims – well, they just flat out sucking lie.
Hurt. VW is going to lose a lot.
I thought my co-worker was a fool for buying a Jetta TDI way before this scandal was known. The atrocious interior, questionable build quality, bland styling, and his dubious fuel cost saving “math” were reasons enough.
Didn’t think Nat. Geo. was “hipster” necessarily: just neat photography with a touch of..well..you know!
Stuff like “Wired” or other Conde Nast publications certainly seem to gravitate that way, but from what I’ve seen, VW ads don’t seem too common.
+1, VanillaDude. This isn’t like Mitsubishi, which sells to people because they can get financed – VW buyers are an educated bunch with higher incomes. And a lot of them are into environmental causes. Precisely the wrong bunch to piss off.
Off to Subaru they go!
Those numbers were always a pipe dream. VW’s sales have never been that brisk; certainly not in recent years to even consider a number that high. It comes back to the arrogance that Germans have when it comes to the US market; thinking they know better than anybody what people here want when in reality they haven’t got a clue.
KKRHODES1 You have it right. This head bashing over VW is crazy. Today most people just do not care. Nothing here to see keep moving. All of the newspapers being printed in NYC could care less. People could care less. They have other problems, Getting a job,finding a house, getting enough money to send the kids to college etc. My buddy has a 2010 TDI and he loves it. If he receives a letter from VW and no money is enclosed he will tear it up and keep driving. If VW was the only one to soil their pants it would be one thing but we have had Ford, GM, Chrysler, Toyota, Honda i could go on and on soil their pants a couple of times.
I’d say that this existential crisis justifies a special shareholders meeting. #7 on the agenda: let go of management without any golden parachute arrangements, for obvious, culpable mismanagement even misbehavior. The so-called Autopapst, Prof. Dudenhöffer estimates the costs between 60 and 70 billion euro.
PS: Love the new Tiguan.
VW is an irrelevant brand in the US and cannot compete with Toyota, Nissan, Honda, Hyundai, Kia, GM, Ford, or even Chrysler. VW is more relevant in Europe and South America with China having the largest potential for their growth. VW has killed their image of being a green company which gave them some credibility in the US, otherwise they are a company that makes German cars for those who cannot afford a BMW or Mercedes but want the prestige of a German car along with the higher maintenance costs.
And yet VW is in the top 3 of automakers in the world – until this scandal they were on track to be #1 this year. So obviously they are doing *everything* wrong. The rest of the planet must be a bunch of idiots.
It strikes me that most US commentary on global VW is like ticks on a rhinoceros screaming about the whole animal melting because they wandered under the nostrils.
Which immediately brings to mind, “Just how many people care about VW in the US?
They can’t have too many fans. Just look at their sales numbers, pre- and post-diesel disaster.
As of the July 2015 market share report here at TTAC, VW had 3.6% of the market in the US. TTAC darling Mazda had all of 1.8%. Subaru only had 3.3%. Part of the 3.6% is Audi, of course, but those are also presumable more profitable sales than what Mazda and Subaru are flogging. And they managed 3.6% without much in the way of flavor of the decade CUVs in VW branding.
So evidently, somebody cares. They were on track to sell more than 500K cars here, pre scandal. More than 13 MILLION globally.
krhodes1, 3.6% in the US. VWs are a rarity where I live.
I knew of VW’s popularity globally, but even 500K (combined) in a SAAR of 17-million is surprising (to me).
Where are these centers of VW-eccentricity? It must be EAST of the Mississippi, ’cause it sure isn’t any further West.
IIRC, you live in the middle of bumfart nowhere. I suggest visiting civilization occasionally.
VW was on its way to irrelevance in the US because of Ford’s resurgence. The yuppies that used to buy VWs started buying Fords a few years ago once Ford got their act together and gave us the good stuff like the Focus, Fiesta and the 3rd Generation Fusion.
Combine that with America’s love affair with the Explorer and Escape and the writing was on the wall for VW, who was caught with their pants around their ankles because they didn’t have an affordable midsize SUV for the masses.
“…for the masses.”
Change that to “…for the discerning, American car-buying public.” The only Marx we ‘Muricans want around here are Groucho, Chico, and Harpo.
I’m always surprised when people ask who buys the Touareg. The obvious answer us sone one who wants a Q7 or Cayenne at a cheaper price.
Here in Vancouver I see more Touaregs than Explorers.
Aren’t they being driven by people who used to live in Hong Kong? Volkswagen has a better reputation in that part of the world than North America.