VWA Sales Drop, But CEO Calls for Patience
There’s some concern consumer confidence remains shaky following the government shutdown that tempered showroom traffic in the first half of October, and that could have negative effect on auto sales through the end of 2013, the automaker says.
Press reports in recent days have pointed to sagging Volkswagen sales in the U.S. as a sign the German automaker is stumbling on its quest toward a No.1 ranking in global volume by 2018, but its top U.S. executive says the brand is performing just as expected.
“Let me be clear on why we see it differently,” Volkswagen of America President and CEO Jonathan Browning tells media during a conference call to discuss October U.S. sales results. “We’re on a long-term journey. Always we’ve indicated that sales growth would moderate after 2009-2012, where we more than doubled the size of the business.
“Most importantly, we’re on track this year to be above 400,000 units for the second-consecutive year and only the second year in 40 years where we’re above that level,” he adds. “So that is progress.”
As VWA has most of the year, Browning points to the outgoing Golf model, which will be replaced next year with an all-new version, and the discontinued Chrysler-supplied Routan minivan, as the main culprits in the brand’s 4.0% volume decline year-to-date.
The Routan won’t be replaced near-term, with the automaker’s CrossBlue midsize CUV concept targeted at the same customer base, but still not green-lighted for production. Routan sales totaled 10,483 units last year, according to WardsAuto data, so that volume will have to come from elsewhere if sales are to return to 2012 levels or beyond next year.
In October, VW-brand sales fell 21.1% on a daily-rate basis (27 selling days this year, vs. 26 in like-2012). Several models suffered steep double-digit declines, with only the Beetle outdistancing year-ago, up less than 1%.
Audi sales remained strong, up 11.0% in October by volume and marking the 34th-straight month of record sales. Porsche deliveries also rose 11.0% in volume in October, and its year-to-date sales have surpassed all of 2012.
There’s some concern consumer confidence remains shaky following the government shutdown that tempered showroom traffic in the first half of October. With Washington’s budget debate tabled until early next year, there could be a negative effect on auto sales through the end of 2013 and into January and February, Browning says.
“We’ve been consistent since the beginning of year talking about an industry outlook around 15.5 million,” he says. “I think with the shutdown and some of these additional questions (and) uncertainty, you could see the industry come in slightly below that.
“Our outlook is a little more cautious than it was before the shutdown.”
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