VW Loses Market Share in Europe as Diesel-Motor Recalls Loom 

• Gain of 8.3% lagged behind industry growth of 9.8% last month
• VW showed “noticeable uptick” in German discounting: Barclays

Volkswagen AG failed to keep pace with European competitors as the German carmaker’s market share slipped last month in the wake of the diesel-emissions test scandal.

Volkswagen’s registrations in Europe rose 8.3 percent in September, while the overall market expanded 9.8 percent, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said Friday in a statement. The owner of the VW, Audi, Skoda and Seat car brands accounted for 23.3 percent of the region’s auto sales last month, down from 23.7 percent a year earlier and the company’s weakest showing since March.

VW has been battling to regain consumer trust after admitting to deliberately rigging diesel engines to circumvent emissions regulations. The Wolfsburg-based company is preparing to recall 8.5 million cars in Europe, one of the biggest such programs ever in the region, after the emissions-test cheating became public on Sept. 18.

“While we are wary of drawing conclusions from data captured only a few weeks after the emissions scandal, we suspect dealers may be resorting to discounts to compensate for any decline in sentiment from consumers,” Kristina Church and Charles Coldicott, analysts at Barclays Plc, said in a report this week.

Carmakers offered 11.9 percent discounts on average in Germany last month, little changed from a year earlier, according to Autohaus PulsSchlag. While the VW brand wasn’t on the trade publication’s list of the top five rebate providers, Church and Coldicott at Barclays said the manufacturer “experienced a noticeable uptick in discounting” in the country in September.

Nine-Month Growth

Industrywide registrations in Europe rose to 1.39 million vehicles in September from 1.27 million a year earlier, with nine-month sales increasing 8.8 percent to 10.8 million autos, the ACEA said.

Groups reporting growth that exceeded the industrywide average last month included Italian-U.S. manufacturer Fiat Chrysler Automobiles NV and German luxury-car makers BMW AG and Daimler AG, the owner of the Mercedes-Benz nameplate, which were all helped by demand for sport utility vehicles. Other carmakers posting gains that matched or beat the market increase included Japanese manufacturers Nissan Motor Co., Mazda Motor Corp. and Honda Motor Co., Seoul-based Hyundai Motor Co. and Tata Motors Ltd.’s U.K. luxury unit Jaguar Land Rover.

“Discounts, improving consumer confidence and declining unemployment” provided “a positive effect on sales,” Klaus Breitenbach, an analyst at Baader Bank AG, said in a report to clients.

Volkswagen remained the region’s largest carmaker by far, with its nine-month market share narrowing to 25 percent from 25.3 percent in the 2014 period. Second-ranked PSA Peugeot Citroen accounted for 10.4 percent of Europe’s car sales, versus 10.8 percent a year earlier.

The ACEA compiles figures from the 28 European Union countries, excluding Malta, as well as Switzerland, Norway and Iceland. The expansion in September marked the 25th consecutive month of auto-sales growth.

Source: Bloomberg – VW Loses Market Share in Europe as Diesel-Motor Recalls Loom

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