What emissions scandal? Volkswagen still sees sales growth in US.(Read article summary)
Despite an emissions-cheating scandal, Volkswagen’s brand appears to have weathered the storm: at least one model experienced its best month on record.
American consumers appear to have at least one virtue: they’re forgiving.
Despite an emissions-cheating scheme that scientists estimate will result in the premature deaths of dozens of Americans, Volkswagen’s brand appears to have weathered the storm – at least in the United States.
The company announced in a press release that sales increased last month by 0.24 percent over October 2014. That is nominal growth, considering the company saw 7.8 percent in sales growth in October 2014, but it is growth nonetheless.
In fact, VW sales growth slowed to -8.10 percent in August, suggesting that the company is actually healthier now than just before mid-September, when the scandal broke.
"We would like to again thank our customers for their patience and loyalty," said Mark McNabb, chief operating officer for Volkswagen of America, in the press release. "Volkswagen is committed to making things right and actively working to restore trust."
Some vehicles saw considerable growth, including the Tiguan, which experienced its best month on record at 167.1 percent in sales growth.
The company has been offering significant discounts, sometimes over $7,000, to maintain sales in the wake of the scandal.
In September, the EPA announced it was investigating VW for circumventing clean air regulations by installing in its diesel vehicles a “defeat device,” which curbs pollution only when the vehicle is undergoing emissions tests. For the past seven years, these cars have been emitting up to 40 times the legal limit of nitrogen oxides (NOx).
Last month, MarketWatch’s Kathleen Burke reported on how the VW brand could be permanently blighted. But, perhaps presciently, she also warned that consumers can be merciful:
History shows that for the most part, customers don’t seem to care about large-scale manufacturer mishaps. Even the obfuscation of the negative effects of smoking hasn’t toppled the tobacco industry, Bernstein says. However, the brand loyalty Volkswagen has worked so hard to cultivate may be what makes them the exception to the rule …
“Consumers have a very short memory about these things,” says Jack Nerad, executive editorial director at Kelley Blue Book. “In this particular instance, Volkswagen buyers are a pretty loyal group in general … this is a bigger blow to them.”
And The Verge’s Chris Ziegler speculated on why consumer behavior appears to have defied gravity:
Perhaps as the scandal deepens, as we learn more about how and why this happened, buyers will start to pick up on it and divert their cash to Volkswagen's competitors. Or perhaps — and this is the coldly cynical view — many Americans simply don't care that they've been lied to about the environmental friendliness of a vehicle. There's circumstantial evidence to back this up: studies show, for instance, that SUV sales pick up when gas prices fall despite miserable fuel economy. For prospective VW buyers, it's hard to pass up a $5,000 discount on a new car.
Whether it’s brand loyalty, ambivalence about air quality, or just the irresistibility of a great deal, the bottom has yet to fall out of VW’s sales. That’s good news for the company and a generous second chance at rebuilding a famous brand.