The Strategist

Volkswagen's market share in Europe fell to a five-years low

04/15/2016 - 15:24

In March, car sales in the EU have increased by 6% to 1.7 million units, almost reaching pre-crisis levels. The first quarter as a whole showed increase by 8.2%, to 3.8 million units. At the time, German automaker Volkswagen’s share on the European market in the first quarter fell to its lowest level in five years - to 23.3%. The fall has been lasting since September, after the suddenly erupted ‘Dieselgate’ scandal.
On Friday, the Association of European Automobile Manufacturers (ACEA) has published data on car sales in the EU in March. New car sales in Europe increased by 6% during this period, to 1.7 million units. These results are similar to sales in 2007, i.e. to pre-crisis levels. This March is 31th consecutive month when car sales are rising. Especially strong increase was noted in Italy (17.4%); France and the UK also had a fairly significant growth (7.5% and 5.3%, respectively). Sales in Spain and Germany fell slightly (by 0.7% 0.04%, respectively). In the first quarter, sales rose by 8.2%, to 3.8 million units, in total across Europe.

In the first quarter, the German automaker Volkswagen has reduced its share of the European market up to five-year low - its share fell from 24.3% in the first quarter of last year to 23.3% this year. This is the worst performance since 2011. The German automaker's sales rose in February by 2.6%, but is lower than the average sales growth in the market as a whole. Thus, Volkswagen continues to reduce the European market share after the diesel cars scandal erupted in September last year.

However, some experts believe that the consequences of ‘Dieselgate’ have not hit Volkswagen hard. Professor at the business school of the University of Warwick Christian Stadler commented on Volkswagen’s results: "While the rates have dropped, this is different from what one would expect. Of course, it is no surprise that Volkswagen’s brand has suffered more than others, but considering the ‘Dieselgate’ hype, we are definitely not seeing such a decline in Volkswagen Group, as many had expected. There is a decline, but it is not as significant. In fact, as shown by the history of other scandals, people often quickly forget and move on". According to Mr. Stadler, Volkswagen is more likely to worry about absence of new models. For example, it has no new SUVs, which is a problem in the Chinese market, where the company has lagged behind Toyota.  


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