On Tuesday, Volkswagen of America posted its November sales figures. It reported a reduction of 24.7 percent in overall sales, as compared to its November 2014 sales figures. In November 2015, Volkswagen sold a total of 23,882 cars, as compared to a total of 31,725 cars in November 2014.
It seems obvious that, as yet, the auto manufacturer has been unable to recover from the emissions scandal which has been dogging the company for the last few months. Despite being a good month overall for the auto industry, and despite the provision of heavy discounts, Volkswagen’s November sales in the U.S. have suffered immensely.
The sales of the small cars involved in the scandal have been the worst hit. Sales of the Passat Sedan plummeted by as much as 60 percent, for example. Sales of the popular Beetle car plunged 39 percent in November.
According to the company, approximately 11 million diesel cars worldwide have been fitted with the scandalous software that has now been proven to cheat emissions standards.
The Volkswagen Group, which is the parent company that sells the Audi, VW, and Porsche brands, posted a 0.4 percent increase in sales of the Audi brand. Up until November, the Audi brand was not involved in the emissions scandal. However, in November, the company admitted that a number of other vehicles such as the AudiA6 and Q5were also in violation of the U.S.’s emissions certification rule. According to the auto manufacturer, 85,000 larger diesel vehicles are also involved in the scandal.
Thus far, the software seems to be fitted only in diesel vehicles, which is why Volkswagen has disallowed dealers to sell these particular vehicles until such a time as the company can guarantee and deliver a reliable solution. Unfortunately, this move has had a disastrous impact on U.S. dealers of the cars, who have been provided subsidies to shore up their bottom line figures by Volkswagen.
According to a recent statement by Volkswagen U.S. Chief Operating Officer Mark McNabb, “Volkswagen is working tirelessly on an approved remedy for the affected [vehicles] …During this time we would like to thank our dealers and customers for their continued patience and loyalty.”
Even more noteworthy is the fact that the plunge in sales figures has been recorded at a time when the overall industry has seen a significant boost in sales. In fact, according to a projection by Edmunds.com analysts, a 2.5 percent sales increase was projected for the auto industry overall.
While Volkswagen dealerships have spent heavily on incentives, performance has not improved simultaneously. According to TrueCar, in November, the Volkswagen Group has spent $3,747 on incentives per vehicle. This figure is up 27percent, as compared to the same time last year. Overall industry spending on incentives, however, has only increased six percent during the period. A small concession to the dismal performance has been the Tiguan crossover, which has risen 88 percent (to 3,907 units) as customers make the switch over from cars to crossovers.
A major drawback for Volkswagen in the current scenario is the fact that the company has yet to publicly propose a solution to the problem. Until a clear plan is outlined by Volkswagen to take care of consumers, many analysts believe there will be no improvement in the situation. According to Kelley Blue Book analyst Alec Gutierrez, there exists a major risk that customers will become so disgruntled that, even if a fix is delivered, they will not return to Volkswagen diesel cars. It seems that Volkswagen may have permanently damaged its credibility in the eyes of its consumers.