Eight Consecutive Months of Volkswagen Sales Improvement Ends in July 2017 - Crossover Volume Still Very Low

After steady declines even prior to the diesel emissions scandal of nearly two years ago, Volkswagen of America took another serious hit in 2016 — the best year on record for the auto industry. Compared with 2012, Volkswagen volume sank by 85,000 sales last year.

But by the end of 2016, Volkswagen’s U.S. sales volume was beginning to rise again. True, that rise was in comparison with a true low — Volkswagen sales in the final one-sixth of 2016 were up 22 percent year-over-year but were 17-percent lower than in the same period of 2012 — but Volkswagen was bouncing back.

The bounce back continued through the first half of 2017, with Volkswagen sales through June up 8 percent despite the market’s 2-percent downturn.

Perhaps July was just a blip on the radar. But Volkswagen’s eight-month streak of improvement screeched to a halt last month as the U.S. auto industry reported its most significant losses of the year, and as Volkswagen’s new SUV lineup continues to dip its toes in American waters.

The Tennessee-built Volkswagen Atlas, according to Volkswagen, is still ramping up production. Though Automotive News reports 23,950 were built by the end of June, only 5,329 copies of the Atlas had been sold in the U.S. by the end of July. In fact, July’s U.S. sales total fell to 1,306 units, the lowest-volume month to date; 46-percent lower than June.

But it is early days for the Atlas, and even earlier days for the new Tiguan. While sales of the old Tiguan plunged 56 percent to 1,484 units — remember, old Tiguan will live on — sales of the new new Tiguan totalled 593 units in its first month on the market.

Even with the discontinued Volkswagen Touareg reporting a 54-percent jump to 475 units and new products coming onstream, Volkswagen’s SUV/crossover volume rose only 5 percent to a modest 3,858 units in July, not nearly enough to overcome Volkswagen’s passenger car losses.

The good news for Volkswagen? The brand’s SUV/crossover volume will surely rise. The second bit of good news? Volkswagen’s car lineup isn’t losing sales nearly as quickly as the car market overall. July’s 7-percent drop among Volkswagen’s cars was nothing compared to the 15-percent drop experienced by the U.S. auto industry’s overall car sector. Year-to-date, while U.S. car sales are down 12 percent overall, Volkswagen’s car lineup is actually up 7 percent, boosted by wagon volume.

42 percent of the Golfs sold in America during the first seven months of 2017 were SportWagens and Alltracks. With modest Beetle and Passat rebounds and only a slight Jetta downturn, Volkswagen is the rare breed in 2017 to produce overall gains because of cars, rather than in spite of them.

Sustaining such a quirky growth strategy is not tenable, of course, not in these prevailing market conditions. But Volkswagen intends to sell a much greater number of utility vehicles in the near future. And if Golf wagons keep selling in decent numbers? You won’t hear us complaining.

[Images: Volkswagen of America]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.