Volkswagen US sales feel effects of emissions scandal – USA TODAY
Volkswagen 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.
The German automaker’s mainstream brand reported only a 0.24% increase, compared to the same period a year earlier, in the first full month since the scandal broke. The company’s Audi luxury brand enjoyed a 16.8% increase.
Kelley Blue Book had projected an overall 12% increase for the industry, which is flourishing amid low gas prices and strong consumer sentiment.
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. The company has admitted that it installed the software on up to 11 million vehicles worldwide, including 482,000 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.
The Passat, also implicated, rose 24.6% to 8,116 units. But the automaker is preparing to begin sales of the redesigned 2016 Passat, a changeover period in which many automakers discount old vehicles to move inventory.
Diesels represented about 20% of Volkswagen’s U.S. sales until the scandal broke in September.
“We would like to again thank our customers for their patience and loyalty,” said Mark McNabb, chief operating officer of Volkswagen of America, in a statement. “Volkswagen is committed to making things right and actively working to restore trust.”
One bright spot was the Tiguan sport-utility vehicle, which soared 167.1% to 4,815 vehicles. In that category, Volkswagen is benefiting from an industry-wide surge of consumers into roomier vehicles.
One potentially significant pothole for Volkswagen is the U.S. Environmental Protection Agency’s fresh accusation that the company has installed cheating software on more than 10,000 vehicles not previously implicated in the diesel scandal.
EPA on Monday said that the so-called defeat devices were implanted to fool regulators on the 2014 Volkswagen Touareg, 2015 Porsche Cayenne, and the 2016 Audi A6 Quattro, A7 Quattro, A8, A8L and Q5.
Volkswagen quickly denied that it had installed illegal software on those vehicles and refused to stop selling them.
That sets up a showdown between the German automaker and the EPA, which has threatened penalties.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.