VW is beginning to lose momentum in key markets, including Europe and the U.S.
The emissions testing scandal that’s enveloped Volkswagen is taking a toll on the maker’s global sales and market share – though nowhere is the impact more obvious than in the United States.
The core VW brand saw a 2.4% decline worldwide last month, according to industry numbers, with demand for the first 11 months of 2015 off by 4.5%. That’s all but certain to assure that the maker slips to second place behind Toyota for the full year after briefly surging into the lead in the global sales sweepstakes for the first half of 2015.
The VW brand gained 2.8% in Europe for November, but it lagged well back of the overall 14% industry upturn as the European market has begun to emerge from more than a half-decade-long downturn. As a result, the entire Volkswagen Group, including such brands as Seat, Skoda, Audi and Bentley, have seen their share of the European market slide from 26.6% in November 2014 to 24.3% last month.
(VW retains sales lead in China. Click Here for the latest.)
The biggest impact was in the U.S., however, where the Volkswagen brand tumbled 25% in November, even as the industry overall headed into record territory. Part of the problem is that VW can’t sell diesel-powered models like the Golf TDI that have, in recent years, accounted for 25% of its American volume.
It remains uncertain when they’ll be back in showrooms, VW officials still working with the U.S. Environmental Protection Agency to come up with a fix for the 2.0-liter diesel engine that was rigged with an illegal “defeat device” designed to cheat on emissions tests.
The loss of diesel models, like the Golf TDI, had a particularly harsh impact on VW in the U.S.
In September, the EPA accused VW of cheating, VW quickly acknowledging the subterfuge affecting 482,000 vehicles sold in the States, and 11 million, in total, worldwide. It has since confirmed it violated U.S. standards with its 3.0-liter turbodiesel, as well.
That leaves the maker potentially liable for more than $18 billion in EPA fines, as well as possible penalties that could come as the result of a U.S. Justice Department criminal probe. Meanwhile, a federal court in California has been assigned to hear more than 450 lawsuits stemming from the scandal.
(California to hear VW diesel lawsuits. For more, Click Here.)
VW has set aside more than $7 billion to help cover the potential costs, while also lining up a credit line for more than $20 billion. But among the uncertainties it faces, the maker now has to rebuild consumer trip and head off a further weakening of its sales momentum.
That’s a big turnaround from the situation during the first half of 2015 when the Volkswagen Group surged past Toyota to become the world’s best-selling automaker – three years ahead of its internal target.
Toyota started to regain momentum going into the second half, and the diesel scandal has made it even more difficult for the German maker.
The issue may be the holiday gift competitors were looking for. VW has been the powerhouse in Europe, handily outselling rivals like General Motors’ Opel, Ford, Renault and others.
“A two-point loss of share in a single month is unprecedented,” and very much appreciated, said the head of a major VW competitor, asking not to be identified by name. “We’re normally looking at a tenth of a point or two.”
The European market has grown 8.6% through the first 11 months of this year, marking the industry’s best performance in years.
(Facing fines, legal bills VW slashes spending. Click Here for the story.)
This is a clear case of abuse of power by a very political government agency, IMO. Many people are starting to ask why this issue is being so blown out of proportion. The EPA has threatened VW with a fine of $18 Billion or more for a trivial violation of exhaust emissions that resulted in no injuries and no deaths to anyone. Compare that to GM’s defective ignition switch issue and reported mid-level management cover-up that resulted in the deaths of 100+ people. For those who don’t understand the disproportionate punishment and/or consequences to VW for a minor infraction via improper ECU software implemented by a small group of engineers and programmers (believed by independent investigators to consist of 10-30 people), the EPA’s threats and the 400+ U.S. lawsuits are monumental and never seen before in history. Unlike the EU who is demanding a recall and updated EU software to correct the issue, the EPA and gold diggers are trying to steal tens of billions from VW employees who had nothing to do with the minute excess exhaust emissions.
As I had previously advised the fallout from the EPA’s absurd and unreasonable actions that some consider extortion… has cost innocent people within VW, Porsche, Audi and their component suppliers in the U.S. and EU, their jobs. Why should these people’s lives be turned upside down because the EPA is posturing and doing all that it can to discourage U.S. consumers from purchasing clean diesel powered vehicles that provide excellent performance and value. The EPA/Obama administration’s goal is to promote impractical, over-priced, toxic battery powered electric vehicles. This has been documented by Obama’s public statements and the EPA issuing the most stringent diesel exhaust emissions requirements in the world to increase the cost of clean diesel powered cars and reduce fuel economy. This is bad government conspiring to damage society so that they can promote their irrational political agendas that consumers have rejected.
How many thousands of employees in the U.S. and EU will lose their jobs due entirely to the knee-jerk over reaction of the EPA? Why should any of these people lose their job over a minor exhaust emissions issue when these people had absolutely NOTHING to due with the trivial excess emissions? Should the PA be held accountable for their incompetence and damage to VW, Porsche, Audi owners and employees, world wide? Many people think so. In fact in Europe many people are asking exactly what the EPA is trying to do other than destroy VW. I believe all who have violated the law and who have displayed gross incompetence and extortionist should be held accountable including those in U.S. government.
You don’t seem to care much about the American auto workers put out of work by lost sales to a company that ADMITS IT CHEATED!It does not matter one twit about what you think How do you get extortion are you just stupid they cheated and admitted it now they must pay.I do not believe this company should ever have existed given the history all it should have been allowed to do was pay reparations to the Polish and Czech slave laborers that built the first car. It not “knee jerk” it is a result – If caught cheating you get punished!By the way you may want to seek some help with your view on the EPA see they help humans and don’t look at corporate bottom lines they like people.
Chris-
You just don’t get it do you? Please explain what DAMAGES any VW diesel owner has suffered from a small group of programmers and engineers violating law by including improper software in these diesel engines when VW is repairing all of these vehicles so that they are fully emissions compliant? How does the trivial VW exhaust emissions issue that injured no one compare to the 100+ people killed by GM’s defective ignition switch? Based on your outrage over a small group of employees at VW lying over the software, shouldn’t every employee at GM be sent to prison for the failings of a small group of people involved with the defective ignition switch? Shouldn’t GM be fined hundreds of billions of dollars and forced out of business with all vendor suppliers in the U.S. and elsewhere also closing their doors with millions of people losing their jobs? Wouldn’t that be more appropriate for the deaths of 100+ people over a product defect that could have been fixed with little or no cost or loss of lives?
Your naïve and misinformed views on the EPA would be funny if not so absurd and incorrect. The EPA is one of the most political government agencies in the U.S. They don’t look out for “children and people” they look out for whatever political talking head will increase their budget so that they can waste billions of dollars annually while doing little of value for the country and often hurting the majority of the populace. The EPA is a bunch of rogue politicians accountable to no one.
Many people in the U.S. desire clean diesel powered cars that get 40+ mpg. The Obama administration had the EPA create absurdly low exhaust emissions for diesel engines – the most stringent diesel exhaust emissions in the world – to prevent U.S. consumers from being able to enjoy clean diesels like the rest of the world has done for decades. That’s bad government imposing bad laws on the populace to promote their unrealistic EV agenda. It’s disgraceful and irrational but people like you who don’t bother to educate yourself on your corrupt government and president fall for the EPA ruse hook, line and sinker. You don’t even know you’re being duped.
As far as VW and other people in the U.S. losing jobs over the trivial exhaust issue, I pointed this situation out to YOU and other people. You seem to believe that it’s OK for other people to lose their jobs over something trivial that they had no control over and no involvement in. When that unfair situation comes home to the U.S. all of a sudden NOW you sort of care about the EPA blowing the situation out of proportion but you are still clueless to the evil ways of the EPA and the Obama administration to force EVs on the populace.
You seem to have some hatred for VW that influences your view of the world. It’s clear the issue goes back to war time. Almost everyone who was involved in WW II is gone or close to it. We can’t change the past and we shouldn’t use the past to color the present. Evil people and governments create war. Our military people and civilians are the ones who all suffer from war. War unfortunately is necessary to protect the freedoms we enjoy in this country. Millions have given their lives to protect our freedom. That however does not make people in other countries evil due to their forefathers waging war against the U.S. some 70 or more years ago. Hate is just wasted energy as it changes nothing. Hating the wrong people makes you bitter and isolated from reality.