SUV Shift Aids VW Sales

Volkswagen of America U.S. sales climb 4.2% in 2018 powered by the German brand’s shift to SUVs, including a refreshed Tiguan and the all-new Atlas three-row model, Wards Intelligence data shows.

“We’re a bit late to the SUV game, but we’ve responded very strongly,” Scott Keogh, CEO of Volkswagen of America, tells media on a year-end sales conference call.

But VW isn’t walking away from the 7-million-unit U.S. car segment, Keogh says, despite significant year-over-year declines for its Jetta (-22%), Golf (-39%) and Passat (-32%) models. Sales of the all-new Jetta sedan were up 42% in December, ending the year on an upswing, Keogh notes. There were 26 selling days in December, same as year-ago.

Derrick Hatami, VW of America executive vice president-sales and marketing, adds the new Jetta consistently has held an 8% share of the small-car segment each month since launching.

“It does reinforce that there is demand for passenger cars – if you can get the product right,” Hatami says.

With the market shift from cars to SUVs, Keogh says VW is now well-positioned with three volume products – one car, the Jetta, and two SUVs, the Tiguan and Atlas – to have consistency going forward.

“If you’re going to have success in the car business, you can’t sit on one product,” he says.

The Atlas, Hatami notes, recorded its best-ever month in December with 6,717 deliveries, up 11% for the month. Atlas tallied 59,677 sales for the year, a 120% increase, with seven of 10 sales coming from conquest buyers, he says. Meanwhile, Tiguan racked up 103,022 sales (+119%), its first year topping 100,000 units.

Looking ahead, Keogh predicts a slight decline in U.S. sales in 2019 to about 17 million units, with good news on employment offsetting negatives such as increasing interest rates and stock-market volatility. VW is keeping an eye on how the tax cuts and tax code changes will play out on a state-by-state basis, he says.