U.S. car sales soar as VW’s plunge

Volkswagen’s U.S. sales dropped sharply in November while many other automakers saw strong gains.

The 25% drop came largely because of suspended sales of diesel vehicles, which are ensnared in the global scandal over VW’s use of software to cheat on government emissions tests.

The losses look even bigger against the backdrop of a booming industry, which is projected to set a sales record this year.

Fiat-Chrysler sales were up 3% for the month, with its Jeep brand leading the leap, while GM sales rose 1.5% and Ford sales were flat, though F-Series truck sales rose 10%.

Nissan was up 3.8%, while Toyota climbed 3.4%. Honda sales fell 5.2%.

VW sold 23,882 cars in November, compared with 31,725 over the same period last year.

The fall-off is largely due to absent diesel sales, according to Kelley Blue Book analyst Karl Brauer.

“Diesel figures in the U.S. were 22% to 25% of their total U.S. sales in any given month,” Brauer said. “Now they have 25% fewer cars that they’re allowed to sell.”

VW has admitted installing “defeat devices” in an estimated 11 million vehicles worldwide, allowing the diesel cars to deliver a unique combination of power and good fuel economy at an affordable price.

The software could detect emissions testing conditions and adjust engine performance to reduce pollution — but only temporarily. On the road, the cars emitted up to 40 times more than legally allowed levels of smog-creating nitrogen oxides.

The devices were installed in 482,000 model year 2009 to 2015 vehicles fitted with four-cylinder 2.0-liter TDI diesel engines and about 89,000 cars powered by 3.0-liter six-cylinder engines. The engines are used in some VW, Audi and Porsche vehicles.

The company now faces government investigation, public censure and multiple class-action lawsuits, and has set aside almost $8 billion to offset diesel-related losses. VW may also face as much as $18 billion in U.S. federal agency fines.

In response to the sinking sales numbers, VW of America Chief Operating Officer Mark McNabb said, “Volkswagen is working on an approved remedy for the affected TDI vehicles. During this time we would like to thank our dealers and customers for their continued patience and loyalty.”

While the company works on the fix, the Environmental Protection Agency has declined to certify VW’s 2016 diesel vehicles. Dealers have been told to stop selling all new and certified used VW diesel cars.

It wasn’t only diesel sales that fell, though. Total numbers of Jetta units sold dropped almost 30%, and numbers on Passats fell 60%. Sales of Beetles were off nearly 40%, while vehicles in the Golf line showed slight increases. Sales of the Tiguan small SUV also increased.

Analyst Brauer said the diesel scandal, whatever its current impact at dealerships, will not have a long-lasting effect on overall sales — but that VW will have to increase its efforts to become a strong player in the U.S. market.

The company is the No. 2 automaker in the world, by volume, and for a brief period even surpassed Toyota to become No. 1 — before the diesel scandal.

“VW’s market share was slipping before the diesel story broke, and has continued to slip,” Brauer said.

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