Cars and Drivers

VW Sales Expected To Crash In November

courtesy of Volkswagen of America Inc.

No one can make the case that VW US sales will improve in November.  However, the collapse may be more than modest. The diesel engine scandal will take a huge toll. VW’s already very modest American sales will be down by 9.5% to 48,000, and its market share will crater to 3.7%

According to KBB, the car research firm, total sales of cars and light trucks nationwide will be 1,300,000 in November, up .1%. The increase is small, but November 2014 was a particularly strong month. November of this year will contribute to “an estimated 17.8 million seasonally adjusted annual rate (SAAR)” That may put sales ahead of those in the years just before the Great Recession. The U.S. car industry will have regained all of its momentum.

As for VW,  Tim Fleming, analyst for Kelley Blue Book said:

“Volkswagen Group, on the heels of another diesel issue involving its higher-end models, appears to have a challenging November. Following an incentive-heavy October that cleared out many 2015 gas-powered models, a shorter supply of vehicles and expanded stop-sales on diesel models will contribute to a slower month of sales.”

It may be that VW will have to continue to offer incentives for months, and perhaps years, to come

VW was already in trouble in the U.S.  While its market share in the EU is 25% which puts it in first place among all manufacturers, and it is a market leader in China, VW has struggled to have even a small fraction of the America sales leaders GM (NYSE: GM) and Ford (NYSE: F) volumes

VW will have sales problems around the global, but at least it will struggle from a position of sales strength in most countries which took decades to build. In America, its situation will go from bad to dire.

 

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