VW March Sales Plunge 18%

In its press release, Volkswagen did not highlight the fact that March sales fell 18.2% to 30,025. Instead VW management spoke about the success of the Golf line of cars, which reached 4,643, up 133.4%. This was a flimsy attempt to hide the disaster of its overall results.

The Golf line has won a number of awards, the most prestigious of which is the 2015 Motor Trend Year. Sales of the winner ought to be much greater than 4,643, Nissan Sentra sales were 21,277 in March, and it is not nearly the leader in its segment.

The other VW lines were slaughtered. Sales of flagship Jetta fell 26.2% to 11,583. Sales of the Beetle dropped 28.8% to 2,444. Passat sales declined 29.5% to 7,794.

It is hard to find the exact cause for VW’s poor results. The car company currently offers 0% financing for 72 months, which is about as aggressive as incentives get.

One problem is its model line. VW can claim four, but barely. It has a range of sedans and coupes priced against larger competitors across the low end of the market. The Golf has a base price of $17,995, the Jetta $17,325, the Passat $23,240 and CC $32,995. VW also offers three wagons, led by the moderately luxurious Touareg, which has a base price of $44,705. Each of these model lines competes against manufacturers from the United States, Japan and Germany.

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America is the Achilles heel of VW’s global sales. VW management has promised that it will expand its model line and introduce new cars that will excite the American market. It has to. However, as VW launches these new models, it will find that all the larger manufacturers have already blanketed the country with direct competition that has established brands, big marketing budgets and armies of dealers.

VW has to make a desperate move from behind, and the odds against it are tremendous.

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