The VW Group posted a very robust set of sales results in September helped by new model additions in the SUV and crossover space.
IHS Markit perspective
- Significance: The Volkswagen (VW) Group has recorded its biggest ever single monthly global sales total with deliveries rising 6.6% y/y to 1.01 million units, according to a company statement.
- Implications: All the company's brands apart from Porsche contributed to what was an extremely healthy level of growth during September, with the VW passenger car brand performing particularly well as it looks to re-establish itself as a main profit contributor to the overall group.
- Outlook: After a week of somewhat negative press reports focusing on concerns over internal competition between its brands, VW has some good news to share with a very impressive set of sales results for September which illustrate the innate strength of the group's brands and product offerings.
The Volkswagen (VW) Group has posted its biggest ever sales figure for a single calendar month with a 6.6% year-on-year (y/y) rise to 1.01 million units during September, according to a company statement. This in turn lifted the year-to-date (YTD) sales tally for the first three quarters of the year to 7,806,600 units, an increase of 2.6%. Commenting on the performance VW Group board member for sales Fred Kappler said, "This record result demonstrates the strength of the Volkswagen Group. Vehicles from our brands are thrilling more and more customers worldwide – our new SUVs in particular are very popular. China continues to play an important role in this respect." In China, the Group's deliveries rose by 6.3% y/y in September to 406,500 units. Its SUVs proved particularly popular as highlighted above, with the Tiguan and Chinese-market Terramont selling well, while the Audi A4 L and new Skoda Kodiaq also attracted a lot of buyers; overall sales in China were up by 1.4% y/y to 2,895,000 units. In Europe the uplift was less marked but still supported by relatively recent SUV launches like the second-generation Tiguan, Skoda Kodiaq and SEAT Ateca. China just bested Europe as the biggest market by sales volume; European sales reached 404,500 units, up 1.5% y/y. Central and Eastern Europe continued to post a particularly positive trend with a 13.8% y/y uplift to 63,400 units, although Western Europe posted an overall decline during the month of 0.5% y/y, largely down to a 3.3% y/y decline in Germany. The Group enjoyed a very strong increase in North America; sales were up 13.5% y/y to 85,900 units, with the Atlas and Tiguan driving sales. The rapid increase in the market in Brazil (up itself by 110.5%) helped to drive a 68.4% y/y increase in the wider South American region.
Brand by brand
At a time when the VW passenger car brand is attempting to turn its financial performance around, it can at least look to a very positive sales performance as a foundation to this process. The brand posted sales of 593,700 units in September, which was an 8% y/y rise, as the main VW Group brand continued to record strong sales momentum in 2017. This translated to a healthy YTD uplift of 2.7% y/y to 4,374,800 units.
Audi's sales rose at the moderate level of 2.6% y/y during September to 178,350 units, according to a company statement. This partially improved the YTD sales volume result for the first three quarters of the year, although it was still in negative territory with a 2.0% y/y decline to 1,380,800 units.
Skoda posted its highest monthly result in the company's history in September with a 5.4% y/y uplift to 112,900 units, according to a company statement. This represented the 22nd consecutive month of growth the company has enjoyed. In the first three quarters of the year Skoda sales rose by 3.6% y/y to 871,100 units.
SEAT has posted consistently improved sales results this year as a result of the addition of the Ateca SUV-B to the range. There was an 11.2% y/y rise in September to 39,800 units, while there was a 13.4% y/y increase to 354,900 units in the YTD.
Porsche was the only VW brand to record a reverse in sales in September as momentum slowed for the best-selling Macan, while the third-generation Cayenne is still to come on line. Sales fell by 5.3% y/y in 20,800 units during the month but increased by 4% in the YTD to 185,898 units.
The Volkswagen Commercial Vehicles (VW CV) unit has announced that its sales volumes have increased by 3.4% y/y to 44,600 units, while in the YTD sales were up by 4.9% y/y to 367,900 units.
Outlook and implications
September's sales results for the VW Group are impressive, and show that the negative publicity from the diesel affair has had minimal impact on unit sales. The fact that the company posted its best-ever monthly sales result during September shows that it has an enviable mix of brands and models that are still proving extremely desirable in all the company's major regional markets, although the performance in Europe is a little under par and this may be partially down to the emissions scandal, with a definite trend of contracting diesel sales being noted in most major Western European markets so far in 2017. VW Group CEO Matthias Mueller was recently asked in an interview with Autocar why he believed customers had been more forgiving of the VW group and brand than may otherwise have been anticipated. He said, "It results from several things. An attractive product portfolio, the continuing confidence of customers in our brands, ability of our employees. And it is happening all over the world." However, the Group still faces significant challenges, not least from the ongoing cost burden of the diesel affair. There were also press stories last week claiming that VW passenger car brand management and works council leaders were becoming increasingly unhappy with internal competition between brands, and specifically with competition from Skoda. Mueller has implied that this will be looked at but with labour costs in Germany up to three times higher than those in the Czech Republic, Skoda's production base, Skoda will always have an innate advantage when it comes to generating margin and it is difficult to see how this can be easily resolved.
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