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'Dieselgate' sends VW to new lows

February 16, 2016

The emissions cheating scandal may be bad news for Volkswagen, but the German automaker's rivals should probably consider sending a "Thank you" note to Wolfsburg. While many posted double-digit gains, VW sales suffered.

The VW logo is reflected in a puddle of water.
Image: picture-alliance/dpa/J. Stratenschulte

For the 29th consecutive month, new car sales in the European Union accelerated in January. But contrary to pre-'Dieselgate' times, VW was not leading the race, new data released by the European Automobile Manufacturers Association (ACEA) showed Tuesday.

While carmakers Fiat Chrysler, Ford and Opel all posted double-digit gains, demand for Volkswagen's namesake brand shrank by nearly 4 percent - the biggest contraction since it was revealed in September that the company had rigged more than 11 million vehicles with software to outsmart pollution regulators. Overall, the German car group, which also includes Audi, Skoda and Porsche, saw sales inch up by just 0.8 percent.

The scandal has slowly but surely chipped away at its position as the European market leader. Whereas a year ago, more than one in four newly sold cars was made by Volkswagen, its market share has now dropped nearly 1.5 percentage points to 24.2 percent.

VW's Spanish-made Seat brand, in particular, has been dented by the public embarrassment. While car sales in Spain shot up by more than 12 percent - a performance only trumped by Italy - Seat sold over 2,000 - or 9.2 percent - fewer units than a year earlier.

France's Renault, which came under similar suspicion last month after failing emissions tests, also lost speed in January, recording a mere 0.7-percent increase, compared with 3.9 percent for its domestic rival, PSA Peugeot Citroen.

'Encouraging' result

In total, more than 1,060 million cars were sold across the 28-member bloc last month, a 6.2-percent year-on-year increase. Since car sales are widely seen as a key indicator of economic health, January's encouraging figures are welcome news at a time of growing concern that the eurozone's brittle recovery is nearing breaking point.

"This result is encouraging for the near future, as the upward market trend remains stable," ACEA said.

But until Volkswagen has won back the trust of consumers, it is its rivals that stand to profit from that trend.

pad/ng (AP, AFP, dpa)