Volkswagen lags amid whopping October sales for auto industry – USA TODAY
New-car sales roared in October, rising 13.6% — even as Volkswagen lagged — and raising hopes that the industry may hit the highest sales levels in 15 years if the momentum continues.
The industry is flourishing amid low gas prices and strong consumer sentiment, posting an annualized selling rate of 18.2 million vehicles in October, according to Autodata.
The increase was led by pickups and SUVs, which had a 21.9% sales increase over the same month last year as families took advantage of low gas prices, Autodata reports. Car sales rose a more modest 4.1%.
Volkswagen, mired in a scandal involving cheating on emissions testing in diesel vehicles, pulled out a sales increase.
Sales of the namesake Volkswagen brand rose only 0.2%, though the company’s overall sales — which include the luxury Audi brand — rose 5.2%.
While modest compared to its peers, the sales increase beat out BMW, the only major automaker to report a sales decline last month. BMW was down 6.6%.
Detroit automakers fared particularly well. GM was up 15.9%, and Ford rose 13.4%. Fiat Chrysler reported a boost of 14.7%, marking its 67th consecutive month of sales gains. All have strong offerings in pickups and SUVs.
The Japanese auto industry also enjoyed a robust month. Toyota was up 13%, Nissan 12.5%, Honda 8.6% and Subaru 20%.
Ford analyst Erich Merkle says that not only did the automaker have its best October since 2004, but that buyers were paying more for vehicles. He says the average transaction price — what customers actually paid for a new vehicle — was up $1,800 over a year ago to $34,600, matching General Motors.
He says it’s “possible” that, for the full year, the industry could top the 17.3 million vehicles it sold in the boom year 2000 to create a new record. “It’s going to be close,” he says.
At GM, sales of the company’s Chevrolet brand increased by 17.6% for the month. Cadillac rose 13%, and GMC rose 18%. Buick slipped 0.2%. The company’s most important and popular vehicle, the Chevrolet Silverado full-size pickup truck, recorded a 10% sales increase to 51,647 units.
All eyes, however, remained on how much of a sales effect that Volkswagen will see.
Volkswagen Group, which includes Porsche and Audi, began to feel the effects of its emission scandal in the U.S. in October, as sales of its namesake brand were flat despite a big month for the overall industry.
What’s not immediately clear is whether Volkswagen is spending heavily on incentives to boost sales — a classic tactic in the auto industry that compromises profits for the sake of volume.
A Volkswagen spokeswoman declined to provide that data.
But VW U.S. CEO Michael Horn has already acknowledged that the company is subsidizing its dealers while they are not allowed to sell diesel cars fitted with software designed to cheat emissions regulations.
Diesels represented about 20% of Volkswagen’s U.S. sales until the scandal broke in September.
The company has admitted that it installed the software on up to 11 million vehicles worldwide, including 482,000 in the U.S. On Monday, the U.S. Environmental Protection Agency alleged problems in another 10,000 luxury cars and SUVs in the U.S.
Sales of the Jetta sedan — the company’s most popular model — suffered a huge blow in October, falling 36.1% to 8,551 vehicles. The Beetle posted a 34.1% decline to 1,279 units. Diesel versions of the Jetta and Beetle are among the cars implicated in the emissions scandal.