Volkswagen Missed Out On US Auto Sales Surge In September, With Consumers Wary Over Emission Scandal

U.S. automakers enjoyed one of the industry's best sales months in more than a decade in September, fueled by strong consumer demand, cheap credit and relatively low gas prices. There was, however, one notable exception in the industry: struggling German manufacturer Volkswagen, which is reeling from a scandal about cheating on emissions standards, saw sales remain largely flat.

Sales hit an annualized rate, the industry standard measure of monthly performance, of 18.17 million units in September, the highest rate since July 2005. In purely monthly terms, the industry sold 1.44 million cars and light trucks last month, up 15.8 percent from the same month last year.

That total included September sales spikes for Ford (up 23 percent); Nissan (18 percent); Toyota (16 percent); Fiat Chrysler Automobiles and Hyundai (both 14 percent); Honda (13 percent) and General Motors (12 percent), the Associated Press reported.

The industry had been predicting a big sales month in September, as Labor Day Weekend began in September this year, after beginning in August last year. [The holiday itself is always the first Monday in September.] Labor Day Weekend is traditionally one of the industry's biggest sales periods each year, with dealers and manufacturers ramping up incentives to consumers as they look to clear out cars to make room for the following year's models.

Volkswagen, however, saw its U.S. sales rise just 1 percent for the month, a clear indication that U.S. consumers have concerns about the brand, and how it plans to deal with a scandal that saw 11 million vehicles worldwide fitted with software programmed to fool emissions-testing equipment. Some Volkswagen diesel models thus emitted pollution at up to 40 times the levels permitted by U.S. environmental regulations.

Though news of Volkswagen's cheating on emissions standards came to light only on Sept. 18, the scandal still made a serious impact on the company's U.S. sales for the month.

“Sales are almost always back-end loaded because of the incentive programs typically in play at the end of the month, so there’s a big last-week push,” Dennis DesRosiers, president of DesRosiers Automotive Consultants, told Canada's Financial Post.

“I’m told that the last 10 days were pretty disastrous,” he added, speaking about Volkswagen's September performance in Canada, where the company say sales plunge 19.6 percent for the month.

One analyst warned the New York Times that Volkswagen's failure to quickly implement a plan to deal with the scandal risked excluding the company from one of the best sales environments in years.

“It’s kind of unheard-of that a company goes this long without announcing anything about next steps,” Jessica Caldwell, a senior analyst at Edmunds.com, told the Times. “You have the dealers out there having to face consumers about what’s going on, and not having any answers. It puts them in a very bad position.”