With Europe Around Its Neck, The Mighty Volkswagen Slows Down

Yesterday, Volkswagen sent out a gushing report, saying that group deliveries rose 6 percent in April and 8.6 percent January to April. Something smells in Wolfsburg. Let's take a look. Europe, Volkswagen's largest market by far, is beginning to be a big drag on the German juggernaut. In March, group sales in Europe were still up a bit. When the European manufacturers association ACEA reports its April data in the coming week, Volkswagen will have a big minus in front of its sales data. Volkswagen's press release hides this fact, it only cites a 1.6 percent gain for all of Europe in the first four months and gives no data for April. Usually, this type of selective reporting is a warning sign. However Volkswagen has reported that way for a while. With a little digging in the archives and spreadsheet work, the following picture emerges. The blue numbers are calculated from archival data, the black numbers are as reported by Volkswagen AG. 4M'12 4M'11 YoY Apr '12 Apr '11 YoY Total 2,890,000 2,660,000 8.6% 732,000 690,800 6.0% Europe 1,250,000 1,230,000 1.6% 313,000 321,700 -2.7% WEUR ex D 661,400 703,000 -5.9% 154,300 171,100 -9.8% EEUR 205,100 155,300 32.1% 57,700 46,200 24.9% China 858,900 741,200 15.9% 225,000 192,700 16.8% USA 173,700 131,500 32.1% 49,300 38,700 27.4% South Am 296,900 295,300 0.5% 67,500 74,400 -9.3% April was a mixed month for Volkswagen, and the bad most likely will get worse. The times of double-digit growth rates seem to be over for a while. Volkswagen sales in Europe appear to be down by 2.7 percent in April, with Western Europe (ex Germany) down nearly 10 percent. South America also took a 9.3 percent hit. The negative numbers are offset by strong deliveries in China, up 16.8 percent and the U.S., up 27.4 percent in April. With nearly half of VW's sales in Europe, it takes a lot of pumping in other markets to keep the ship from taking on water. Even if Volkswagen goes into minus territory, it will be far from sinking.  Any hopes of becoming the number one automaker or even remaining in the number 2 position are quickly fading. Now imagine how other European makers will perform that don't have the global cushion Volkswagen has. Bad news for Opel, PSA, Fiat and Renault. from The Truth About Cars http://www.thetruthaboutcars.com

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