Volkswagen’s Sales Sink While Problems Mount

Volkswagen

Maybe the word “Volkswagen” translates to “problems” in German.

News broke in September of the company’s intentional deception regarding the emissions of its diesel engines. October sales were relatively flat, and dealers felt confident that they could weather the storm with VW’s support.

November, however, told a different story.

Volkswagen sales in the United States collapsed by 25 percent last month. Dealers had hoped that things would improve, Autoweek says,

But as Volkswagen drifts into a third month of a seemingly unbound scandal, that tone is changing and dealer frustrations are bubbling to the surface. The absence of a ready-to-go fix, plus continuing inventory shortages and the prospect of more new-car sales pain, is stirring angst and even anger in VW’s dealer network.

Falling sales are only part of the scandal’s continuing consequences.

We don’t know yet how much of the collapse in sales is due to consumer disdain against Volkswagen. The company can’t sell its diesel-equipped cars until a fix is in place, and supply of gas-powered cars is so low that dealers are basically selling from empty shelves.

It could also be that buyers are still willing to take home a Volkswagen but are forced to wait until dealers have more inventory. Plus, VW has reduced many of the incentives that were active in October, forcing potential buyers to wait even longer to make their purchases.

But Steve Kalafer, who owns a 17-franchise VW dealer, knows the problem that Volkswagen faces won’t be solved with incentives. He told Autoweek,

Volkswagen of America has their head in the sand. It’s not just going to be another incentive or another bonus that gets Volkswagen out of this. It’s going to be the dealers who get Volkswagen out of this. The reputation of Volkswagen is spiraling towards worthlessness.

Those are harsh words from a guy who has a lot riding on Volkswagen’s success.

To help pay for the estimated $86 billion costs of the scandal, Volkswagen has secured a 20 billion euro loan from European banks on a 1-year term. If it fails to pay back that loan, VW said it is ready to sell some assets. Keep in mind that VW owns Audi, Porsche, Bentley, Lamborghini, and more. Which ones could go? Nobody knows for sure, but Reuters says,

Volkswagen may also consider divesting luxury car brands Bentley and Lamborghini or motor bike brand Ducati.

Not only is this crisis costing Volkswagen money and customers–it could also cost the company parts of its very structure.

How do you see the next year playing out for Volkswagen?

-tgriffith

Find Certified Pre-Owned Cars and Used Cars in your area at CarGurus.

1 Comment

  1. Man, it is sort of sad to see them falling apart like this, but really, they brought this on themselves. If it comes to it, I really hope the government does NOT bail them out.

Leave a Reply

Your email address will not be published. Required fields are marked *

*
*
Website