Key Models Pick Up Pace for VWA in Otherwise Sluggish June

The Passat, Jetta and Beetle, core models for Volkswagen of America as it seeks to become a higher-volume player in the U.S., posted stronger sales in June, though overall the brand saw only marginal gains for the month.

Volkswagen delivered 36,957 vehicles in June, up 0.6% from year-ago’s 38,170 on a daily basis (26 selling days this year; 27 in like-2012), according to WardsAuto data.

The tepid results are attributable in part to aging or outgoing models, such as the Routan minivan (off 84.7%), CC (down 32.5%) and Golf (off 42.4%).

But the brand got better performances out of its two critical cars, the Jetta, up 13.1% to 14,813 units, and Passat, up 10.2% to 10,874. Through the first five months, total Jetta volume had slid 4.5% from like-2012 and Passat sales were up just 1.0%.

“We’re encouraged with Passat and Jetta, both were strongly up for the month,” VWA President and CEO Jonathan Browning says in a conference call with reporters to discuss the results. Passat recorded its best June ever and its highest first-half volume in history.

He credits the results in part to the car’s gaining market momentum, as well as greater availability of diesel engines, an option that is increasing in popularity with Passat buyers.

“It’s natural progression,” Browning says of the midsize sedan’s June volume. “When we kick off (launch of the new model), we said we want to sell 10,000 a month, and we’re seeing it build to that pace.”

But the TDI engine has “especially been standing out,” he adds, pointing to the Passat’s 31.3% take rate for the diesel on 3,405 units.

“We continue to believe customers are not fully aware of the pleasure of driving with the diesel, as well as its economic benefits,” Browning says. “That’s a word that is continuing to spread and is building momentum. So there’s still room for growth.”

Diesel sales across the VW-brand lineup accounted for 24.3% of total volume.

Dealers get most of the credit for “working hard” to move Jettas in June, the VWA executive says.

Thanks to the launch of the convertible model, Beetle deliveries also outpaced year-ago, the auto maker says. And the Tiguan small cross/utility vehicle, though down 11.7% for the month, recorded its best first-half sales in history on 15,526 units.

“It was a solid month in a competitive market,” Frank Trivieri, vice president-sales, says of the brand’s overall performance. “It’s an encouraging sign that the three vehicles ahead of year-ago were the Jetta, Passat and Beetle.”

Trivieri says three of VWA’s five sales regions are outpacing year-ago: the Northeast, South Central and Pacific.

“The Midwest is a little behind, but the Big Three have been aggressive there,” he says. “And the Southeast is behind a bit. But with the vehicle lines we have coming, we think those will pick up over next six months.”

Browning says the competitive environment continues to get tougher, however. “Overall incentive activity has been increasing in the last couple of months. And (we) definitely sense that that level of intensity is picking up as we go through the year.”

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