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

Steph Willems
by Steph Willems
volkswagen would have seen a sales gain if certain countries werent 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]

Join the conversation
3 of 18 comments
  • Lorenzo Lorenzo on May 31, 2016

    Well, now we know where Marcelo's Brazil reports went. I was wondering what was happening to Fiat in Brazil, since it was ready to overtake Volkswagen there, before the troubles.

    • Seth1065 Seth1065 on May 31, 2016

      Lorenzo, Did I miss the Marcelo's mention, what happen to him, he had a unique take on things

  • Jingo_Balls Jingo_Balls on Jun 01, 2016

    Numbers are great when you cherry-pick them. VAG's EBITDA is up, they have about as much cash on hand as they had this time last year, and their overall profit is steady. Their current liabilities went up because they took some loans, but they also sold a lot of bonds to offset that. They're an incredibly profitable company in great financial shape. Dieselgate is an annoyance, no more. In fact, nobody cares about Dieselgate except regulators, a few investors, and a couple greens who don't and never would own one...if VAG's TDIs came back on the market in NA tomorrow those sales would be nearly as strong as before the scandal. The only concern among current owners is about trade in value - private party sale prices are strong in the parts of the country where these were popular and non-CPO used car sales at dealers are at practically CPO prices. Demand is still strong, but VW dealers can't sell new or CPO. Owners are waiting to see what kind of compensation package comes their way so they're not getting rid of them, so supply is low. America is not the center of the automotive universe, as much as we would like to think we are - after VAG takes the initial loss in whatever quarter the final settlement is announced, they'll bounce right back, mostly in the strength of China's sales. And they won't need government bailouts to do it, either.

  • GrumpyOldMan No/almost no rust, yet all the floors have been replaced? Hmmmm.....
  • Wjtinfwb Great looking Supra, one of my all time favorites that "got away". In this era, I was driving a 280ZX which I really liked, but was more of a boulevardier than a sporting car. I looked at these Supra's from the '82 introduction but couldn't quite swing the price. Plus, I was sure the next Datsun Z would hit it out of the park. '84 came and Nissan gave us the disco 300ZX, which i disliked intensely. Supra's we're getting harder to find and more expensive as this generation wound down. Then, the howl of a small block Ford with a 4 barrel Holley caught my ear and I was sold. An '85 Mustang GT took the place a Supra should have occupied and that was it. The next gen Supra was, much like the 300ZX, more of a cruiser than the previous generation and more expensive. Several Mustang's and VR6 GTi's later I'm now back to looking for a Supra only to find out they're more expensive after almost 40 years than they were when new!
  • Kwik_Shift Knobs, buttons and even sliders would be good.
  • Syke Son of a Chevrolet dealer back then, grew up in the showroom. To this day, I cannot get the appeal of the '57 Chevy, must less it being the poster car of the rock and roll Fifties. The '55 was gorgeous, the '56 wasn't hurt too badly by the dealer-demanded restyle (full width grilles were in style, and the '55 didn't have one, so the dealers panicked), but the '57? A bad attempt to keep up with Ford and Plymouth, redeemed only by the continuation of the Tri-Five build quality (exceptional for it's day) while the '57 Ford and Plymouth turned out to be rust buckets.$35,000? No. Freaking. Way.Oh, by the way, that was the year Ford outsold Chevy for the first time since pre-WWII. Style was everything back then. As the son of the Ford dealer (in my grade school class) was more than happy to remind me constantly.All was redeemed by 1958. Even if the '58's weren't as well built as a Tri-Fives.
  • Pianoboy57 Green is my favorite color but I never owned an actual green car. Then I got a Subaru Outback in Wilderness green.