Volkswagen USA Sales Actually Increased In October 2015, Powered By Big Rebates
Improve. Increase. Rise. Grow.
These are all words that can be applied to the status of Volkswagen’s sales in the United States in October 2015.
Yes, that Volkswagen. The brand which, it was revealed in late September, was intentionally cheating on emissions tests with four-cylinder diesel engines, powerplants found under the hood of approximately one-fifth of the vehicles sold by the company in America. The brand which has seen its share price tumble as more negative information is uncovered each day. The brand which was forced to set aside billions of euros to cover some of the costs of a massive, yet-to-take-place recall.
Yes, that brand, Volkswagen, sold 74 more new vehicles in October 2015 than they did one year earlier, a 0.2-percent year-over-year increase during a period in which the auto industry produced a 13.6-percent gain.
Auto sales exploded in October 2015 with a seasonally adjusted annual rate in excess of 18 million units. The 1.455 million new vehicles sold in America in October 2015 represents 174,000 more new vehicle sales than the industry managed in October 2014, as passenger car volume increased by a modest amount, as pickup truck sales rose seven percent, as SUVs/crossovers jumped 28 percent.
Yet until Reuters revealed in the latter stages of the month that Volkswagen of America may actually sell more new vehicles this October than last, it was rightfully assumed that Volkswagen’s U.S. volume would tumble. After all, more than 20 percent of the vehicles the company typically sells in a given month, 2.0L TDI models, weren’t allowed to be sold.
Volkswagen HQ spent millions to comfort dealers which, already suffering from a U.S. sales slowdown, desperately needed to sell cars. Not only was much of a Volkswagen’s typical sales potential washed away with the four-cylinder diesel stop-sale, there were great fears that the company’s image was instantly and severely tarnished.
In such desperate circumstances, Volkswagen went straight after loyalists, luring current Volkswagen customers into dealers with thousands in rebates on gas-powered cars.
Before the scandal even erupted, significant incentives at Volkswagen were already required to maintain remotely respectable volume. And even with those incentives in place, Volkswagen was struggling.
In the face of greater adversity, Volkswagen dealers upped the ante with an ultra-focused aim on delivering gas-powered cars. TrueCar estimates suggest that Volkswagen Group per-unit incentive spending jumped 29 percent to more than $3,300 in October 2015.VW’S Big MoversOctober2015October2014%ChangeTiguan4,8151,803167%Golf GTI2,5201,72446.2%CC67859314.3%e-Golf596159,500%Golf R518——Eos39420295.0%—— ——Total9,5214,323120%
Consider this: Volkswagen nameplates which weren’t previously available with diesel engines – CC, Eos, Golf GTI, Golf R, e-Golf, and Tiguan – posted a combined sales increase of 120 percent, a gain of 5,198 sales compared with October 2014. Those six vehicles generated only 14 percent of Volkswagen’s U.S. volume at this time last year, but 31 percent last month.
For the Tiguan, October became the nameplate’s best ever month as year-over-year volume jumped 167 percent. GTI sales jumped above 2,000 units for the first time since August of last year. CC sales rose to a 14-month high, climbing on a year-over-year basis for the first time since April 2013. The all-electric e-Golf achieved its best month ever. And October was also the best month yet for the Mk7 Golf R.
Meanwhile, sales of the Touareg – an SUV now linked to a new six-cylinder diesel emissions dilemma– and Passat rose 45 percent and 25 percent, respectively.
Over at Volkswagen’s upmarket brands, Audi and Porsche, sales jumped 17 percent and 11 percent in October. Even the A3, which was unavailable with the arrested 2.0-liter TDI, posted a 15-percent improvement and accounted for more than one-third of Audi’s passenger car volume. While Porsche car sales slid 23 percent, its two-pronged utility vehicle lineup shot up 63 percent to 2,362 units, nearly six out of every ten Porsche sales last month.
All was not sunshine and roses, of course. Besides the costly lengths to which Volkswagen had to go to generate this level of sales activity, the brand’s top seller still declined. Jetta sedan volume plunged 36 percent, a loss of 4,821 units. The Beetle lineup plummeted 34 percent. The TDI-dependent Golf SportWagen generated only 983 October sales, down by more than half compared with its average from the previous five months. Volkswagen’s market share slid from 2.4 percent in October 2014 to 2.1 percent in October 2015.
A 0.2-percent uptick is not a sign of revival, particularly not when the sales figures were released to coincide with news that Volkswagen’s gas-powered cars have their own emissions troubles.
Stable volume may, however, be a sign that Volkswagen has the wherewithal to propel the company’s real customers, the dealers, through a self-inflicted crisis.
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.
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- 3SpeedAutomatic And this too shall pass.....Ford went thru this when the model T was introduced. It took the moving assembly line to make real money. As time progressed, it got refined, eventually moving to the Model A. Same kind of hiccups with fuel injection, 4 speed automatic, Firestone tires, dashboards with no radio knobs, etc, etc, etc. Same thing with EVs. Yep, a fire or two in the parking lot, espresso time at the charging stations, other issues yet to be encountered, just give it time. 🚗🚗🚗
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The sales increase was probably due to people figuring they'd get a good deal on non-diesel VWs. They probably got fleeced by sharp salesfolk knowing how to appeal to greed. Today I heard that in Canada, VW is offering dealers $25/month floorplan compensation on each stock unit. Since floorplan costs are typically $65 to $70/month, $25 isn't going to cut it on TDIs rusting out back which may not be legal to sell for months if not literally years. How long are dealers supposed to prop up VW? You know, while the mainly family-owned firm back in Germany dodders around with no one in charge, self-destructing a bit more each day.
Volkswagen brand US monthly market share in October 2014 was 2.4%. Last month, it fell to 2.1%. That's pretty bad. The fact that VW unit sales were essentially flat while the market is booming is not good at all.