Volkswagen’s Big American Comeback

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Sales of Volkswagen cars have picked up in the United States and are in positive territory so far this year. Many experts believed that a diesel emissions scandal would depress results for years. VW has sold 76,290 units in the United States this year, up 10% year over year.

VW’s cheating has already cost it over $18 billion in the United States and Canada. It depressed sales in the region for two years. The scandal was front page news off and on for months, which is one reason observers believed there would be no rebound. The brand was too badly tarnished.

VW remained the best-selling car in the European Union after the scandal broke. It is number one in market share in the region at about 24%. VW is also one of the leading car companies in China, and recently it pulled ahead of GM, its top rival there.

VW has had low market share in the United States for years. To claw some of that away from rivals, it obviously has to grow more rapidly than the market. VW’s 10% improvement in the first three months of the year handily bettered an industrywide drop of 1.5%.

A few VW models accounted for the improvement. Sales of its Golf line rose 48.2% for the first three months to 17,977. The SportWagen part of the line did particularly well, with sales higher by 185.9% to 6,602. Passat sales contributed substantially as well, up 29.9% to 18,267.

The success of Golf and Passat are even more impressive given the move of U.S. car consumers to sport utility vehicles (SUVs) and crossovers. The Golf is a relatively inexpensive compact with a base price of $19,895. It sits in a segment of the market in which every major car company has at least one model. The same is true of the Passat midsized sedan, with a base price of $22,440. It has an army of competition.

VW’s comeback is improbable, which makes it all the more impressive.