#dieselgate costs VW market share. Does it really?

clean diesel

Today, Europe’s auto manufacturer association ACEA published EU new passenger car registration data for October. Overall EU registrations were up 2.9 percent in the month, but that wasn’t what observers were looking for. A mere 75 seconds after ACEA released the numbers, Bloomberg hit the wire, pronouncing that “VW’s European Market Share Falls in First Month of Scandal.” Later, “falls” was edited to “slips.” Volkswagen’s group sales were down a mere 0.2 percent in the month. Was it due to dieselgate? The proof is far from conclusive, and the facts deserve at least a few minutes of closer inspection.

  • Most of EU sales by large manufacturers are made to order, with a month or more wait time before delivery. The stats count actual registrations, not sales. Any significant change in buying behavior would register with the same delay. In an article published 12 minutes after ACEA’s news release, Reuters points out:

“Because car deliveries typically occur several weeks after purchase decisions, the full repercussions of the scandal, which started with VW’s admission on Sept 18 that diesel-engine emission tests had been rigged, are expected to become more apparent in November registration figures.”

  • In the second half of October, Volkswagen stopped sales of affected diesel models, which was expected to disrupt registrations. Are sales down because people would not buy the cars, or because people would not get them?
  • That Volkswagen’s EU registrations underperform the market is nothing new, a fact that Bloomberg concedes to people who read beyond the headline: “Even before Volkswagen’s rigging of diesel-engine emissions tests came to light in mid-September, the Wolfsburg-based carmaker, Europe’s largest, was losing ground to competitors.” Ten months into the year, EU car sales are up 8.2 percent, while Volkswagen’s group sales rose only 6.4 percent.
  • Lastly, EU registration data are increasingly losing their relevance, as carmakers and dealers register their own cars at an alarming scale. Most are immediately deregistered. They land on the barely used car lot at discounts of 25 percent or more, or they are resold in a complicated web of EU VAT arbitrage. In Europe’s largest car market Germany, 31.5 percent of all new passenger vehicles were registered by dealers or manufacturers in October, kfz-Report says. If a third of reported registrations reflect sales that never happened, how significant are a few percentage points up and down the monthly charts?

Associated Press gave the matter a little more thought, and then headlined, a bit disappointed: “European car buyers reluctant to punish Volkswagen severely for emissions scandal.”

Sales by Opel Group (-2.7%), PSA Group (-0.9%), Renault Group (-0.7%) dropped more than those of supposedly dieselgate-affected Volkswagen, but why mention it if it ruins a good knee-jerk story.