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Volkswagen sales plunge in UK, industry shrugs off emissions scandal so far

Published 04/12/2015, 15:16
© Reuters. Volkswagen cars are parked outside a VW dealership in London
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By Costas Pitas and Alissa de Carbonnel

LONDON/BRUSSELS (Reuters) - Volkswagen's (DE:VOWG_p) emissions scandal has so far had little impact on the broader European car market, Renault-Nissan boss Carlos Ghosn said on Friday, though data showed VW itself saw a plunge in sales in Britain last month.

"So far there is nothing obvious in the statistics coming from the market," Ghosn, who is also president of the Association of European Carmakers (ACEA), told a news conference.

"For the real impact you are going to have to wait some months, probably starting in January, February, if there is any," he added.

VW, Europe's largest carmaker, is grappling with the biggest business crisis in its 78 year history after admitting in September it cheated U.S. diesel emissions tests for toxic nitrogen oxide and in November that it also understated carbon dioxide emissions.

Data on Friday showed sales of VW-branded cars last month plunged 20 percent year-on-year in Britain, Europe's second-biggest car market behind Germany, mirroring a steep decline in the United States.

Sales of the German group's upmarket Audi models fell a more modest 4 percent, while those of its mass-market Seat and Skoda brands were down 24 percent and 11 percent respectively.

Across the whole British market, however, new car registrations rose 3.8 percent year-on-year in November to 178,876, the Society of Motor Manufacturers and Traders said, reversing a 1.1 percent drop in October.

"November's sales might have been boosted by some consumers delaying their purchases from October when the VW emissions scandal hit the headlines," Chief UK economist Samuel Tombs at Pantheon Macroeconomics said in a note.

In October, Ford (N:F) and Vauxhall (N:GM) recorded large UK sales declines as well as VW, pushing the whole market down, but November data showed both had bounced back with Vauxhall up 26 percent, helped by the recently launched new Astra hatchback.

Analysts have said VW's emissions scandal is likely to accelerate a shift away from diesel vehicles that was already underway, and boost demand for smaller gasoline engines and hybrids.

The World Health Organization classed diesel as a carcinogen in 2012, and policymakers in many European states have since begun adjusting incentives at national and local levels to discourage its use.

Most vulnerable to such a shift are Renault (PA:RENA), Fiat (MI:FCHA) and PSA Peugeot Citroen (PA:PEUP), which depend heavily on sales of small diesel cars and are trailing behind the Japanese - and even VW - on plug-in technology.

The British data showed sales of diesel, petrol and so-called alternative fuel vehicles (AFV) all rose in November, although the biggest increase - up 8.6 percent - was for AFVs, primarily plug-in hybrids and pure electric models.

The latest ACEA data showed European sales of VW group models down 0.8 percent in October, but overall car sales in the region up 2.7 percent.

© Reuters. Volkswagen cars are parked outside a VW dealership in London

Car deliveries typically occur several weeks after purchase decisions, meaning the October figures were probably too early to register much impact from VW's problems.

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