BUSINESS

Volkswagen Sales Dive In Canada, Rise In U.S. After Emissions Scandal

10/02/2015 08:21 EDT | Updated 10/02/2016 05:12 EDT
Volkswagen's auto sales in September edged up in the U.S., but took a dive in Canada compared to the same month a year ago, in the wake of its scandal over emissions standards cheating. 

The news that VW installed a cheat device in its diesel cars broke on Sept. 18 and was expected to reduce consumer confidence in the brand, especially in North America.

But that left three weeks in which consumers were unaware of the trouble, including the important Labour Day weekend.

Sales of its Jetta, Beetle and Golf lines were up 0.6 per cent on the year in the U.S. to 26,141 vehicles sold.

But in Canada, where the low dollar makes its vehicles more expensive, sales were down by 19.5 per cent compared to a year earlier. Audi sales fell by 13.2 per cent. 

Sales for the luxury Audi unit, which initially was not initially implicated in the scandal, were up 16 per cent in the U.S.. It was only later in the month that it turned out that surreptitiou Audi vehicles also had a defeat device installed.

VW didn't report sales of diesel vehicles, which were suspended on Sept. 21 as the emission scandal widened.

The impact on VW's sales thus far is hard to determine from today's data, as the revelation occurred mid-month,`` said TD economist Dina Ignjatovic. 

"That said, anecdotal evidence suggests that sales were hit hard during the latter part of the month.  The longer term implications for the automaker will depend on how it manages the crisis and if it can restore its brand image,`` she said. 

The automaker has seen overall sales slide this year in the U.S. by 2.5 per cent, as buyers are increasingly attracted to pickup trucks. Canadian vehicle sales were on track to rise by 8.6 per cent.

Hot month for sales

September is traditionally a hot month for automobile sales as car owners look ahead to winter driving and dealers begin to offer incentives to clear this year's stock of vehicles.

In the U.S., Ford's sales grew 23 per cent in September, Nissan surged 18 per cent and Fiat Chrysler jumped nearly 14 per cent. Sales at General Motors rose 12 per cent, while Toyota posted a 16 per cent gain and Honda was up 13 per cent.

A combination of easy credit and an optimistic consumer helped power sales.

In Canada, the gains aren`t so large, but most automakers did well in September. Ford sales were up four per cent, FiatChrysler up 1.1 per cent and GM up 1.6 per cent, mainly because of pickup sales. Toyota sales were up 2 per cent.

Automotive consultant Dennis DesRosier estimates 174,337 vehicles were sold in September in Canada, including 111,357 light trucks.

Volkswagen probe to take several months

Volkswagen now says an internal probe into how a cheat device to fool emissions regulators came to be standard on its diesel vehicles will take several months.

After a seven-hour meeting Wednesday evening, the company said it would not be ready to provide "well-founded" answers to shareholders' questions about the scandal by November, when it had initially predicted a report from law firm Jones Day would be ready.

A five member committee headed by acting board chairman Berthold Huber is monitoring the progress of the investigationl.

The board announced no further details of its recall of 11 million vehicles.

It did appoint chief financial officer Hans Dieter Poetsch to become board chairman replacing Ferdinand Karl Piëch, who resigned in April.