Volkswagen Sales are Well and Truly Tanking

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It didn’t seem like it was going to be so bad at first. The whole Volkswagen diesel emissions scandal that had executive heads rolling and consumers demanding satisfaction somehow didn’t translate into disastrous sales numbers for the brand. Until now.

VW started out by offering incentives including a Goodwill Package for existing diesel owners. Those affected were offered a $500 dealer credit, $500 prepaid Visa card, and three years of roadside assistance on their cars. The idea was to generate positive feelings and keep people with the brand.

There were also incentives for existing VW owners to purchase a new car with $2,000 cash back. That number has now dropped to $1,000 to $1,500 depending on the model. Numbers for the month of October were flat despite the industry as a whole seeing a rise, not ideal but certainly not horrible given the scandal.

November was a different story. Three months out from news of the cheat and VW is in a serious nosedive. According to Automotive News, the month of November saw sales down by 25 percent. That’s the steepest decline for the brand since the Great Recession.

Any hope that things would get better with time is gone and there’s genuine concern on the part of dealers that things are only going to get worse. Dealers hoped that emergency aid from VW would help them make it through the rough patch, but a revolving door of executives isn’t reassuring. The lack of a plan also has them on edge and has consumers still questioning whether or not they want a VW in their driveway at all.

Regulatory approval of VW’s plan to put their diesels into compliance is still pending in the US. That plan was submitted hours before a November 20 California deadline proving just how much the company is scrambling to make things right.

It’s not only bad feelings about the diesel scandal that are hampering sales. Inventory is also an issue. Diesels are off the table so that leaves dealers with only gasoline vehicles to sell and they don’t have enough of them on their lots. Some dealers have less than half the inventory they usually have at this time of year with the traditional year-end sales looming.

Low inventories, consumer distrust, and a lack of action to fix diesels already in consumer hands means it’s likely to be anything but a happy holiday season for Volkswagen dealers in the US this year.

Nicole Wakelin

Nicole Wakelin