Volkswagen, Audi sales increase despite emissions cheating scandal – Los Angeles Times
September auto sales were so strong in the U.S. that even Volkswagen squeezed out a small gain — despite halting sales of its diesel cars because of an emissions test-rigging scandal.
Volkswagen’s U.S. division said it sold 26,141 vehicles in September, up by just 145 cars from what it sold in the same month a year earlier.
Volkswagen’s Audi brand, whose A3 diesel version is its only model caught up in the emissions-rigging scandal, was mostly unaffected. Audi reported that domestic sales in September increased 16.2% to 17,340 vehicles.
“Volkswagen’s deception is dominating headlines, but it is not keeping shoppers away from other brands’ showrooms,” said Jessica Caldwell, an analyst at auto information company Edmunds.com.
Automakers sold more than 1.4 million vehicles in the U.S. in September, a 15.8% gain from the same month a year earlier, according to Autodata Corp., an industry research firm.
General Motors, Ford, Chrysler, Toyota and Nissan all posted double-digit increases.
“It is an incredibly robust market,” said Beth Ann Bovino, senior economist at Standard & Poor’s corporate credit rating agency. “Considering there are still so many older vehicles on the road, the market might not be tapped out.”
Auto shopping company TrueCar.com believes automakers will sell 17.4 million vehicles in the U.S. this year, which depending on the exact number could break the industry’s record sales of the same amount in 2000.
Others in the industry are projecting auto sales well above 17 million, which would make it the second best year ever.
Attractive new products, especially crossovers and small sport utility vehicles, are part of the growth as well as advanced technology, said Akshay Anand, an analyst for Kelley Blue Book.
“Cars continue to get safer and smarter, with hosts of new features every single year,” Anand said.
Many economic factors point to continued strength in auto sales, Bovino said. The economy has gained 250,000 jobs a month for the past year.
“We also have seen younger buyers coming into the market,” Bovino said. “They weren’t there during the recession and weaker part of the recovery.”
Consumers aged 20-37 now account for about 27% of total car sales, up from 18% in 2010.
Construction trades, an important source of truck purchases, also is contributing to the auto sales boom, Bovino said, noting that housing starts reached 1 million in 10 of the last 12 months and U.S. construction spending rose 0.7% in August.
Ford’s F-series pickup truck sales rose nearly 17% last month. GM’s truck sales including its full and medium size pickups, rose 18%.
Low gas prices also are fueling auto sales, said Mark Wakefield, head of the automotive practice at the AlixPartners consulting firm.
“As they stay low longer people buy new vehicles or buy bigger vehicles,” Wakefield said.
Prices are falling even in California, which has some of the most expensive gasoline in the nation. The state average stood at $2.96 a gallon for regular gasoline Thursday, according to the Automobile Club of Southern California, 6.1 cents less than last week.
General Motors’ September sales rose 12.5%, to 251,310 vehicles, compared with the same month a year earlier, Autodata said.
Ford had a bigger gain. The automaker said its monthly sales jumped 23.3%, to 221,269 vehicles.
FCA, which owns Chrysler and Fiat, watched sales rise 13.6%, to 193,019 vehicles. It was the company’s best September sales since 2000.
Toyota had September U.S. sales of 194,399 vehicles, a 16.2% increase.
Honda sales rose 13.1% to 133,750 vehicles last month, a September U.S. sales record for the Japanese company.
Nissan posted sales of 121,782 vehicles, an 18.3% gain and also a September record.
Automakers are optimistic sales will continue to grow.
“The economy still has room to grow, and so do auto sales,” said Mustafa Mohatarem, GM’s chief economist.
Volkswagen, however, might not do as well in future months, analysts said.
“The automaker has a rough road ahead, not only through 2015 but into 2016 as well,” Anand said.
Federal and California regulators announced two weeks ago there is test-evading software on cars with VW’s 2-liter, four-cylinder diesel engines. The software detects when the vehicles are undergoing laboratory emissions tests and changes how they perform to make it appear as if they meet pollution requirements.
The vehicles, however, were emitting as much as 40 times the allowable amount of smog-forming nitrogen oxide when they were driving on roads and not undergoing tests.
The scandal forced the company to halt sales of its VW and Audi brand cars equipped with the diesel engines, sparked investigations on both sides of the Atlantic and triggered the sudden resignation of its chief executive.
Although VW squeezed out a small sales gain last month, there are other signs of erosion. VW brand’s sales are down almost 20% from August.
The average sales price of a new car buillt by Volkswagen aloo fell almost 2% from August to September to $39,008, according to a review of transaction data by Kelley Blue Book. The figures include sales of Volkswagen’s upscale Audi and Porsche brands.
Prices for used VW brand cars also are sliding. Gas models slipped 4% and diesels dropped 21% in the last two weeks, according to Kelley Blue Book.
The company has taken a hit in consumer perception, according to a report from AutoPacific, an industry research firm.
AutoPacific surveyed 500 vehicle owners and found that 64% said they do not trust Volkswagen.
“How Volkswagen handles this issue is critical. Trust is an important issue with consumers, and every brand works hard to maintain that trust,” says Dan Hall, vice president at AutoPacific.
The survey also found significant suspicion of the auto industry, with 64% of the respondents saying that they think other manufacturers are, or may be, using test-defeating devices on their diesel vehicles and 55% suspicious that gasoline vehicles are similarly affected.
“These figures point to the overall skepticism of consumers with manufacturers,” Hall said.
Even other automakers are down on Volkswagen.
“This one company’s deeds has damaged trust in the auto industry,” said Fumihiko Ike, head of the Japan Automobile Manufacturers Association and chairman of Honda Motor Co., told reporters Thursday in Tokyo.