Here’s How Volkswagen Did in Its Most Important Market In November

December 15, 2015, 12:39 PM UTC
US-VOLKSWAGEN
The logo of German car maker Volkswagen (VW) is seen at Northern Virginia dealer in Woodbridge, Virginia on September 29, 2015.
Photograph by Paul J. Richards — AFP/Getty Images

Europe fell out of love with the continent’s largest carmaker in November, as the reputational damage from the diesel emissions scandal started to make itself felt.

Volkswagen AG (VLKAY) saw its market share dip by over two percentage points year-on-year in November, according to industry group ACEA. All of its major brands suffered from the scandal that has engulfed the company in the last three months, with high-end marque Audi suffering the biggest loss, proportionally.

Although all of the VW group brands posted year-on-year increases, they all lagged a 13.7% increase in overall new car registrations across the 28-country bloc in the month. Overall, the VW group’s share of its home market fell to 24.3% from 26.6% a year earlier, with the flagship VW brand’s share slipping from 13.4% a year ago to only 12.1%.

Diesel vehicles, which are at the heart of VW’s problems, account for nearly half of its sales in the E.U., having benefited in recent years from environmental regulations that cared more about emissions of carbon dioxide than nitrous oxides.

Some of the biggest beneficiaries of VW’s decline were U.S.-based rivals General Motors Corp. (GM) and Ford Motor Co. (F), who added 0.2% and 0.4% to their respective market shares.

The figures bear out analysts’ expectations that the scandal would affect only Volkswagen rather than the whole car sector: the 13.7% increase across the sector is one of the strongest monthly numbers this year, although industry executives expect growth to slow noticeably in 2016.

Demand has been slow to recover from the recession caused by the Euro debt crisis, and only this year have consumers in countries such as Spain (where sales are up 21% year-to-date) and Italy (+16%) had the confidence to make big ticket purchases.

Fears that the VW scandal could hit the German economy have also been slow to materialize, at least so far. Although German exports dipped in October, Carsten Brzeski an economist with ING Diba in Frankfurt, argues that was more to do with the strength of September’s numbers than with VW sales falling off a cliff. Half of the market share it lost in November went to other producers with production in Germany (including GM’s Opel and Ford), while much of the rest went to companies that use the same German component suppliers as VW.