VW And Hyundai Are Sales Losers Again

The U.S. October car and light truck sales numbers were another reason for the industry to cheer the remarkable run the industry has had since the depth of the recession in 2009 when the American market yielded only sightly more than 9 million units. That figure will likely be closer to 16 million units this year. Although overall sales dipped 4.2% to 1.139 million, some companies had their best October sales in years. The exceptions to the mostly successful month were VW and Hyundai along with stablemate Kia.

VW’s problems in the U.S. are so severe it is a wonder that its American management, led by Jonathan Browning, President and CEO of Volkswagen Group of America, has not be sacked and the entire line up of its cars replaced. It routinely finishes near the bottom of quality measurement surveys. Buyers just don’t like its products. And, it has a desultory line-up which includes the bland Passat and Jetta sedans, the GTI (which is at least fun to drive, but so are many competing vehicles), the ancient Beetle, and overly expensive Touareg SUV which has a name as weird as its design. Even with promotions which include “$0 down, $0 first month’s payment, and $0 at signing”, it cannot forces cars are the doors of its dealerships. VW’s market share in October dropped to 2.8% from 3.1% in the same month last year.

Hyundai and Kia sales have also fallen off a cliff, particularly given that they were the hot brands in the U.S. for several years. A scandal over how each promoted miles per gallon has take a toll so severe that it will take years for each to regain its brand equity–if that ever happens. And, the largest Japanese and U.S. car companies has bench marked the models of the South Korean companies and come up with very effective competing vehicles of their own.

Hyundai, Kia, and VW needed American sales to fuel their marches toward world domination of the car business. They can give up on that strategy now.