By on April 14, 2016

2015 Volkswagen Beetle Classic, Image: Volkswagen Group of America

Compared with February 2016, March 2016’s U.S. sales at the Volkswagen brand jumped 21 percent.

So everything’s back to normal, right? The diesel emissions scandal’s impact has clearly waned, right? Volkswagen’s U.S. team obviously figured out how to market, price, and stock a gas-only lineup, right?

No. This is why we examine an automaker’s sales volume on a year-over-year basis, and why understanding the seasonality of the auto business is essential.

In March, as in February, Volkswagen earned 1.7 percent of the U.S. auto industry’s volume. Yes, Volkswagen volume grew by about a fifth, but the industry grew by about a fifth. The industry sold 250,000 more new vehicles in March than in February. Three additional selling days certainly helped — the daily selling rate was up by less than 6 percent.

Yet so consistent is the massive industry-wide sales increase in March, as the buying season truly kicks off, that the auto industry has adopted a fairly accurate method for determining the Seasonally Adjusted Annual Rate. SAAR is the means of determining how the rate of sales in a high-volume month such as March (or May, August, or December) or a low-volume month (January and February most notably) would play over the course of a calendar year.

Thus, March, with nearly 1.6 million new vehicle sales, wasn’t nearly as healthy as February, with its 1.34 million new vehicle sales. The U.S. auto industry’s SAAR fell from 17.5 million units in February to slightly less than 16.6 million units in March, a 13-month low.

Granted, the U.S. auto industry’s seasonality isn’t nearly as severe as in other countries. Due in part to plate changes in March, the United Kingdom’s auto industry just exploded with its best March ever, with twice as many sales last month as in January and February combined. The record level of sales was noteworthy, but the March surge is predictable. Over the previous five years, the month of March accounted for 18 percent of the new vehicles sold in the UK. March, you’ll recall, is responsible for 8 percent of the days on your calendar.

2014 Volkswagen Polo lineup

(Note: The Golf and Polo are the fourth and sixth-best-selling vehicles in the UK. As a duo, they’re earning nearly triple the market share of the entire Volkswagen brand in America.)

Even in Canada, the industry is prone to tremendous swings from winter to spring. May volume in 2014 and 2015 was double January’s sales total.

The U.S. auto industry’s fluctuations over the course of a given year aren’t as extreme. But there is a level of predictability to the seasonal changes, which is why it’s unwise to credit Volkswagen with a 21-percent sales month-to-month increase in March. Year-over-year, Volkswagen volume was down 10 percent in March 2016, the third consecutive March decline for the Volkswagen brand, even as the industry’s March volume expanded for a seventh consecutive year. Volkswagen of America owned 2.7 percent of the U.S. market in March 2012; only 1.7 percent in March 2016.

2015 Volkswagen Golf GTI side, Image: © 2014 Timothy Cain/The Truth About Cars

Year-over-year, March sales of the core Golf hatchback, GTI, Golf R, e-Golf, Jetta sedan, Beetle, Eos, Passat, CC, and Touareg declined, collectively tumbling by 4,616 units, or 17 percent.

Volkswagen did manage to sell 42-percent more wagons in March 2016, and Tiguan volume jumped 53 percent to a March high of 3,519 units. But the Golf SportWagen and Tiguan remain low-volume models, contributing less than one out of every five Volkswagen sales in the first-quarter of 2016. The Golf Alltrack arrives in the fall.

For Volkswagen’s U.S. operations, the TDI scandal last September arrived at a low point for the brand. Volkswagen’s U.S. sales declined in 22 of 29 months ending in August of last year. Prior to noxious news, Volkswagen was already on track for 2015 volume to fall to a four-year low despite record industry-wide sales.

As for April, the market typically contracts by approximately 10 percent compared with March, although the degree to which March outperforms April has decreased steadily over the last four years. If Volkswagen maintains its hold on 1.7 percent of the U.S. auto market and the overall market decreases by 10 percent, Volkswagen would sell approximately 24,400 new vehicles in April, a 19-percent year-over-year loss.

Let’s see if that happens.

[Images: Bettle and Polos, Volkswagen; GTI, © 2014 Timothy Cain/The Truth About Cars]

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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33 Comments on “March Volkswagen Sales Better Than February, But Still Falling...”


  • avatar
    Kyree S. Williams

    Looks like that redesigned Tiguan and the new 7-seater can’t come soon enough.

    • 0 avatar
      sportyaccordy

      From what I’m hearing, the Tiguan IS the 7 seater, which bums me out as I was hoping for something on the smaller end of the CUV spectrum

      • 0 avatar
        Kyree S. Williams

        Fret not. My understanding originally is that a regular, five-seat Tiguan (Link 1) would debut as planned, but that in addition, there would be a stretched variant that could seat 7 for the U.S. market.

        However, prototypes that are quite a bit larger and that look nothing like the Tiguan—but closer to the CrossBlue concept of a few years ago—have recently been spotted (link 2). Though falsely-badged, you can clearly tell these are Volkswagens because of corporate styling cues like the roof rails, the shape of the negative license plate area, the angular tail-lamps, the door handles and the mirror skullcaps. So the Tiguan and the 7-seater might indeed be different vehicles. That actually works out better, because a proper 7-seater needs to be wider than the compact Tiguan would allow. A 7-seat Tiguan, on the other hand, would end up being closer to the Mitsubishi Outlander…useless.

        Link 1: http://images.hgmsites.net/hug/new-volkswagen-tiguan-european-spec-2015-frankfurt-auto-show_100527679_h.jpg

        Link 2: https://www.thetruthaboutcars.com/2016/04/spied-three-row-volkswagen-suv-barely-anything/

        • 0 avatar
          derekson

          The production “CrossBlue” has been a known product for years due to the required expansion at Chattanooga to produce it.

          Last I saw, they were saying VW will only sell the LWB Tiguan in the US, which I think is a huge mistake since they could use as many sizes of CUV as they can possibly build. IIRC though, the dimensions for the expected LWB Tiguan aren’t really much bigger than other compact CUVs, and it’ll be more of a 5+2 seater than a true 7 seater. I think the length quoted was something like 2 inches longer than an Escape.

          • 0 avatar
            Kyree S. Williams

            Well, that’s not bad, then. Even the new Tiguan appears to be on the shorter side of compact (and the current one is more or less sub-compact). So a longer one (which probably wouldn’t be long-wheelbase, since the added length would be behind the rear wheels in the cargo area) would stave off comments about it being too small.

            Plus, even though they’re useless for serious 7-seater duty, compact crossovers like the Rogue and Discovery Sport have been favored for their small, occasional-use third-row seats.

        • 0 avatar
          sportyaccordy

          From the latest news I am seeing, we are going to get the Tiguan XL with 2 rows and an option for a 3rd row, and the SWB version coming over as a limited “R” version.

          http://www.thecarconnection.com/news/1100109_2017-vw-tiguan-suv-aims-for-u-s-with-third-row-higher-mpg

          Though VW is probably in full panic mode right now, so news coming out on this is probably not very reliable at the moment. In any case, my interest in this is nonexistent if we don’t get the SWB version. I’d rather roll the dice on a used Q5.

          • 0 avatar
            Kyree S. Williams

            That makes sense, too, and I bet they’ll just call the Tiguan XL a regular “Tiguan” in our market.

            BMW does this. The new G11 / G12 7-Series is only sold in long-wheelbase form here in North America, so the “L” has been dropped, and all versions just use -i as a suffix instead of -Li, as they did in the past (750i vs 750Li).

  • avatar
    seth1065

    IS VW putting a lot of cash on the hood or saving cash for the fines? They need a redesigned Jetta and passed to help their sales, the CUV and SUV , when ever it gets here should be a boost for them assign they are still here which I expect they will. Not sure if even w/o diesel gate their sales would be up much w cheap gas prices.

    • 0 avatar
      notwhoithink

      Cash on the hood. There are a number of finance and lease specials, and varying cash bonuses/incentives being advertised nationally that are at least $1000. I’m pretty sure that last month some were $1250 or $1500.

    • 0 avatar
      brenschluss

      I visited a VW dealer at the end of last month to try a GTI and while I ended up with something else, they were pretty up front about their willingness to deal. I didn’t get the sense that they would have been stingy with the incentives, I’m pretty sure they really want to sell some cars.

    • 0 avatar
      sportyaccordy

      I am feeling like the Jetta is DOA, unless they bring it back up to the level of the Golf. What VW really needs is a range of crossovers, as that’s where the growth and forgiveness is. If Dodge can see year over year sales increases with the 8 year old Journey VW can sell CUVs by the boatload, if only they will make them big and cheap enough.

  • avatar
    sportyaccordy

    I can’t be the only one hoping for GTI ATPs to get low enough to be worth gambling on.

    • 0 avatar
      ijbrekke

      Right there with you. Struggling to find the line though: what if things continue to sink and VW pulls out of the market entirely? Dealer and service network would dry up and resale value would plummet. This is especially relevant because I have no intention of owning a VW outside of warranty.

      • 0 avatar
        derekson

        Even if VoA somehow left the US market (and there’s no way this happens), they would surely be legally required to support warranty and service work through Audi dealers.

      • 0 avatar
        sportyaccordy

        I’m not so sure about the service network drying up. There’s still a lot of money in that. IIRC service generates more $$$ for dealerships than sales a lot of the time. Dealerships are more up in the air, but I don’t quite see VW making such a move. It would be unprecedented. VW is still moving hella metal and will only move more with the revamped Tiguan, and their sales in Canada are up up up.

        What I would be afraid of though is even deeper cost cutting, bringing on a quality decline rivaling the dark days of the MKIV era. Granted, I think most of the problems of that era stemmed from design, not quality cutting, but the memory still lingers.

        In any case the GTI is still the working man’s 911 and I find it hard to justify choosing anything else for my next ride, even with VWAG’s problems.

        • 0 avatar
          Timothy Cain

          “Their sales in Canada are up up up.”

          Not so much of late. Over the last five months, Volkswagen’s Canadian volume is down 15%. 2016 Q1 sales plunged 23%.

          During VW of America’s steady pre-scandal decline, Volkswagen Canada was still surging, however. Post-scandal, they’re falling fast.

  • avatar
    ijbrekke

    As was pointed out on this site a couple months ago, their lineup outside of the Golf/GTI is extremely underwhelming.

    Want to win the market back? Match or exceed the Hyundai/Kia warranty. Public perception of the company and the vehicles would instantly improve.

    Sadly, this would take a level of foresight and humility that I fear VW is not currently capable of.

    • 0 avatar
      Dan

      Yep. VW can fix their garbage reputation with a huge warranty ala Hyundai, they can build cars compelling enough to buy in spite of that reputation ala Jeep, or they can continue to swirl around the bottom of the bowl like Mitsubishi.

      They’ve made their choice.

    • 0 avatar
      SSJeep

      Absolutely. Better warranty terms would help VW regain some of the share they have lost due to people who have been burned by repairs (or know someone who has). Hyundai had to increase their warranty terms to 10/100 in order to overcome the damage done by earlier models, and it worked.

      • 0 avatar
        RHD

        Absolutely right. That would be a very smart move by VW, even if they are mortgaging their future to get through the present crisis.
        It might even motivate them to build more dependable cars, which would be a win for everyone involved.

        • 0 avatar
          tonycd

          RHD, David Halberstam tells an interesting story in The Reckoning about when Lee Iacocca took over Chrysler. He quickly realized their quality was crap. He also quickly saw that the Finance guys who held an iron grip over the company (a pox that still afflicts GM and Ford to this day) wouldn’t approve the expenditures needed to improve it.

          So he executed a nifty end run: a 5-year, 50,000-mile warranty as a marketing ploy. He knew the cars were so bad, Finance would reluctantly approve upgrades because they knew it’d cost them even more to honor the warranty if they didn’t. The move was successful, at both levels.

          • 0 avatar
            Eyeflyistheeye

            The Reckoning was an excellent read. I only wish Halberstam (RIP) would have updated it during the era of Ghosn acquiring Nissan and Ford with Jac Nasser.

      • 0 avatar
        onyxtape

        I think the 1999 model year had a 100,000 mile powertrain warranty (which sounds suspiciously like – we won’t cover anything “electronic”).

        • 0 avatar
          sportyaccordy

          Kind of reminds me of the explanations for engine failures in MotoGP. They will say, “failed generator (alternator)”. Yes, the generator failed because a piston rod punched through it lmao.

    • 0 avatar
      derekson

      They need to bring compelling product that fits the desires of the US market more than things like warranty.

      The Jetta and Passat weren’t really executed poorly, but the market zigged and VW zagged. And they’ve taken way too long to get the next generation models out. They went downmarket just before companies like Hyundai/Kia started forcing mainline brands to have nicer interiors and features previously reserved for luxury cars.

      The refreshes of each somewhat addressed those issues, but they should’ve come after 1-2 years, not 4-5 years. And the replacements should be coming out now rather than 2-3 years off.

    • 0 avatar
      TMA1

      VW was playing the Hyundai warranty game before Hyundai even got into it. Doubt they played for very long though:

      http://www.nytimes.com/1993/10/15/business/company-news-volkswagen-extends-10-year-warranty-to-1994-models.html

      “The 10-year-100,000-mile powertrain warranty is the longest offered by any car maker in the United States, Volkswagen said.”

  • avatar
    Whatnext

    Hmm, I have to say that it seems as if you’re trying to make this a worse story than it is. Last March VW had diesels to sell (@15-20% of their sales) but this March they don’t. And yet their sales only fell by 10%, so diesel customers might be staying home, but others aren’t. Buyers definitely aren’t punishing VW for unethical behaviour.

    In fact when you consider how old three of their main products are (Jetta, Passat, Tiguan) it’s quite remarkable sales have held up this well.

  • avatar
    Von

    Are we going to start a VW death watch?

    • 0 avatar
      sportyaccordy

      No, that would make about as much sense as the GM death watch. VW will not pull out of the US market. Even with their troubles they are still selling a lot of cars here, and even if they pull out they will still have a lot of problems (lawsuits and the TDI fix). Staying in the market is the least of their worries, they need that revenue/profit.

      • 0 avatar
        Von

        You are right, but we did the GM death watch.

        And this exchange is probably pointless, it’s a death watch, just add it to the title and a serial number behind it.

      • 0 avatar
        derekson

        They also have massive capital investment in production for the NA market in their plants at Chattanooga and Puebla, MX. They aren’t going to walk away from that investment when it means CUVs that will return huge increases in future income.

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