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18th of October 2018

Economy



Volkswagen Group warns of sales turbulence

Volkswagen Group warned of more sales fluctuations this quarter as it reported that deliveries in Europe dropped nearly two-fifths last month, reflecting the challenges the 12-brand group is facing to get all cars in its fleet certified under new emissions procedures.

The VW Group, which includes Porsche, Audi and Skoda, reported European deliveries fell 37 per cent from the prior September to 256,700 cars. Worldwide deliveries fell 18 per cent to 827,700 cars.

Volkswagen has been hardest hit among carmakers struggling to adapt to new emissions standards under the “worldwide light vehicles test procedure,” or WLTP, which took effect last month.

The new standard is meant to give customers a more realistic picture of fuel economy by compelling carmakers to test their vehicles in conditions that are more representative of real-world conditions. But the changeover is wreaking havoc on some carmakers, which have struggled to get the testing and certification done on time.

BMW, which released figures earlier today, showed a global decline of just 0.8 per cent in deliveries last month, indicating they were far better prepared for the new standard than Volkswagen — a result of booking out testing sites early in the year, according to the company.

Christian Dahlheim, Head of sales at VW Group, said:

As expected, we delivered considerably fewer vehicles in September due to the WLTP changeover. This will continue to impact deliveries in Europe in October, and we expect November and December to be stronger months in this region.

He emphasised that despite the steep drop, an earlier surge of deliveries before WLTP took effect meant that VW was still on track for a record year in sales.

European deliveries this year are up 4.2 per cent, to 3.4m vehicles. Global deliveries are also up 4.2 per cent, to 8.1m vehicles.

“Following the very strong summer months, we expected lower deliveries in September, both in the overall market and for the Volkswagen Group, as a result of the WLTP changeover,” Mr Dahlheim said.

WLTP is not Volkswagen’s only weak spot, however. China, its biggest market, recorded 5.7 per cent fewer deliveries last month.

VW said the “main reason” for this decline is a “reluctance to buy on the part of Chinese customers as a result of the continuing tariff dispute with the USA.”

Year-to-date deliveries in China are still positive, rising 5 per cent to more than 3m cars.

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