VW Rivals Gain In Europe Despite Hefty Price Cuts, Discounts.
“The VW diesel scandal has added a totally new competitive spirit to the market and forced it to pull out all the stops to fight off the anticipated sharp drop off of sales of not just diesels, but all of its vehicles”
Western Europe’s healthy looking sales figures for 2015 masked some frenetic and expensive activity by Volkswagen to prop up its sales after the “dieselgate” affair.
As wounded Volkswagen’s competitors circled to pick off its business, Peugeot-Citroen and Renault of France were the biggest gainers while Honda of Japan, despite new and seemingly attractive but apparently over-priced products, performed weakly.
On the surface, market leader Volkswagen’s performance looked adequate, as its subsidiaries including upmarket Audi and Porsche, workaday Skoda and SEAT and its own namesake VW brand, saw sales rise 5.5 per cent in 2015 to 3.2 million. But the overall Western European market powered ahead by nine per cent to 13.2 million, according to data from the European Car Makers Association (known by its acronym in French ACEA), and in December rose a remarkable 15.2 per cent to 1.1 million.
Western Europe includes big markets like Germany, France, Britain, Italy and Spain.
VW brand sales rose only 4.3 per cent in December to 124,500, while its market share slipped to 12.3 per cent in 2015 from the previous year’s 12.6 per cent. In December VW brand market share dived to 11.7 per cent from 12.9 per cent in the same month of 2014.
Since news last September that Volkswagen cheated U.S. regulators with software designed to produce clean diesel emissions only when the regulators were looking, the company’s image has been severely damaged. The diesel scandal was replicated to a lesser degree in Europe, and made worse by its failure to meet some E.U. fuel consumption regulations as well.
Peugeot grabbed market share from VW with a jump to 6.9 per cent in December from 6.3 percent. Renault’s market share leapt to 8.6 per cent from 7.7 per cent in the month. Both companies have powerful competitors in the booming small SUV market with the Peugeot 3008 and Renault Captur.
Noticeable laggard Honda’s sales in 2015 fell 1.7 per cent to 118,189 and rose only 0.2 per cent in December, despite launching its HR-V into this booming small SUV sector in the fall. Honda now lags behind Mitsubishi, Suzuki, and Mazda in Europe.
Peter Schmidt, editor of fortnightly European newsletter Automotive Industry Data (AID) said VW’s weak image has forced it to spend heavily to prop up sales.
“The VW diesel scandal has added a totally new competitive spirit to the Western European market and forced it to pull out all the stops to fight off the anticipated sharp drop off of sales of not just diesels, but all of its vehicles,” Schmidt said.
But it could have been worse.
“VW’s loss of market share was not at the pace though that some had feared. My own expectation was that the VW brand would lose sales at least twice the rate it actually lost them. Even so, many buyers are simply holding off in the hope that a cornered or troubled VW will incentivize even more,” Schmidt said.
Fiat Chrysler Automobiles Jeep subsidiary was a big winner last year, led by its new small SUV the Renegade. Jeep sales rose 118.1 per cent to 82,560 with most of that increase coming from the Renegade, which is built in Italy using many components from the Fiat 500.
But Honda languished.
“Honda was one of the poorest performers in Europe. It now has good products like the HR-V, the little Jazz and bigger SUV the CR-V, but Honda has shot itself in the foot by its (high) pricing stance,” Schmidt said.
There is still hope for VW as it tries to drag itself up from the mess of its own creation.
“VW still appears to have a premium image among Europe’s volume car manufacturers and buyers still trust its quality, reliability and fuel economy of petrol (gasoline) and diesels. The bottom line is that despite the scandal car buyers are more interested in value for money (than the environment) and with the sharp drop in diesel prices at the pump, I even expect VW diesel sales to hold up,” Schmidt said.