Volkswagen (VW) lost market share in Europe for the 13th consecutive month since the emissions scandal erupted in September 2015, as competitors took advantage of a loss of confidence in the German car maker to attract buyers.
VW, which was losing ground to rivals even before admitting to emissions-test cheating last year, accounted for 22.9% of the region’s vehicle sales in September compared with 23.3% a year earlier, the European Automobile Manufacturers’ Association (ACEA), said in a statement on Friday. Industrywide registrations rose 7.3% in September to 1.5-million vehicles, outperforming Volkswagen’s 5.6% gain.
European car sales have been increasing since 2013, rebounding from a two-decade low in the aftermath of the financial crisis. Growth has cooled in recent months as concerns about the UK’s exit from the EU and Deutsche Bank’s future cloud the region’s economic outlook.
Vehicle manufacturers posted their first sales dip in almost three years in July, typically a weak month for the sector, and September’s gain came in below the 7.7% increase posted in the first nine months.
“European automobile demand appears to have peaked,” analysts at Moody’s Investors Service, including Bruce Clark in New York, wrote in a report last week. “Manufacturers’ ambitious volume expectations for their new models will keep pricing pressure high and could result in discounts and incentives eroding profit margins and cash flows.”
The company’s nine-month European market share narrowed to 23.9% from 25% a year earlier, the lowest level for the period since 2011. The company was battered by negative publicity in September related to investor lawsuits and the resignation of the head of development at the Audi luxury brand amid legal investigations.
VW shares, which have tumbled 27% since the cheating became public, rose 0.8% to €118.60 at 9.34am in Frankfurt trading, valuing the company at €63bn.
Renault, Mercedes-Benz parent company Daimler and Fiat Chrysler Automobiles posted the region’s biggest sales gains in September, with increases of more than 14%.
The Fiat brand and French car makers including Renault led the list of top automotive discounters in Germany in the preceding three months, according to figures from trade publication Autohaus Puls Schlag.
In the UK, which exceeded Germany as the biggest European market in September due to a semi-annual licence plate change that prompts a demand surge, registrations in the month rose 1.6% to 469,696 vehicles. While that’s the highest level to date for a September, according to the Society of Motor Manufacturers and Traders, slowing gains in recent months indicate that uncertainty tied to the economic effects of Brexit is weighing on buyers.
Sales jumped 9.4% in Germany and 2.5% in France. The Brussels-based ACEA compiles numbers from the EU’s 28 member countries, excluding Malta, plus Switzerland, Norway and Iceland.
Outside of Europe, Volkswagen’s namesake brand was hit by declines in the US and Brazil, the company said in a separate statement on Friday. Still, a 23% surge in deliveries in China helped the brand increase sales 6.7% to 547,700 vehicles globally. That gain boosted nine-month deliveries 0.6%, the first time this year that cumulative sales were positive, the VW brand said.
“Positive development in China contrasts with challenges in other regions,” Juergen Stackmann, head of sales for the VW brand, said in the statement.
Bloomberg