Volkswagen Would Have Seen a Sales Gain If Certain Countries Weren't Basket Cases

The diesel emissions scandal can’t be blamed for all of Volkswagen’s sales woes.

Today, the automaker announced first-quarter profits fell 86 percent compared to the same time last year, not surprising given its sidelined diesel models, the hit to its reputation, and a hastily cobbled together $18.2 billion scandal fund.

Worldwide sales of Volkswagen passenger cars fell 1.3 percent (year-over-year) this quarter, but the scandal doesn’t tell the whole story. That number would have been in positive territory if select countries weren’t grab-your-money-and-get-out economic disasters.

The loss of global sales for the brand amounts to 19,924 vehicles. When deliveries of all Volkswagen Group makes are factored in — every VW, Audi, Skoda, Seat, Bentley, Porsche and Lamborghini — the company posted a sales gain of 0.6 percent.

In any given country, VW makes up the biggest slice of the group’s sales pie — a slice that gets bigger in overseas and developing nations.

Going by the delivery numbers, it looks like economic turmoil in a few countries erased the possibility of overall VW sales growth.

North American countries aren’t among them. The blame for that continent’s first-quarter VW Group sales decline of 2.2 percent (down 5.5 percent in the U.S., 10.6 percent in Canada, and up 10.5 percent in Mexico) falls mainly on the scandal and all those sidelined diesels.

Brazil, a big VW customer now wracked with corruption and a plummeting GDP, is a large part of the picture. Thanks to Brazil’s moribund economy, which Forbes describes as “stuck in the mud and rolling back on a cliff, 10,000 feet above hungry man eating dinosaurs,” sales fell 37.6 percent.

That’s a whopping 38,458 units erased from last year’s first-quarter figures. And the Amarok pickup is the only VW diesel in that country.

Russia, whose economy has been on the skids for some time ( causing some automakers to flee or delay investment), saw its VW Group sales fall 15.5 percent. That’s 6,338 fewer deliveries for a country that declared it didn’t really care about diesel emissions.

Japan’s weak economy and changing demographics pose a challenge even for domestic automakers. For VW, it meant a sales slide of 21.2 percent, or 5,920 fewer deliveries.

These three countries represent the biggest sales drops for the company, and they each have an underlying affliction totally unrelated to the company’s scandal. The brightest light for VW Group, like most automakers, was China. Deliveries were up 6.4 percent (57,311 units), but it wasn’t nearly enough to offset the losses in other key markets.

Unless those markets turn around, it’s going to mean an even steeper uphill climb for the brand.

[Image: Volkswagen of America]