Passat powers VW brand to 35% sales increase
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Volkswagen brand's U.S. sales rose 35 percent in March to 36,588 units, for the marque's best first quarter since 1973.
Audi sales increased 18 percent to 11,585, helped by strong sales of the A5 and A6.
VW Group of America's total sales -- including VW brand, Audi and Bentley -- jumped 30 percent to 48,379.
The VW brand's gain was mostly driven by robust demand for the mid-sized Passat, which hit U.S. showrooms in September.
Since the U.S.-built Passat's arrival, VW brand sales have increased 35 percent or more for seven consecutive months. Passat sales surged to 10,032 from 38 a year earlier, when the imported version was being phased out.
Breaking a barrier
"Two years ago, we sold 10,168 Passat sedans for the year, and now we've broken the 10,000 barrier for the month," said Jonathan Browning, CEO of VW Group of America.
Sales of the redesigned Beetle hit 1,969 last month, vs. 500 a year earlier, while Tiguan SUV sales rose 35 percent to 2,659.
Despite a rise in gasoline prices, sales of the compact Jetta were down 12 percent to 14,966.
But higher gasoline prices helped boost demand for the diesel-powered Passat TDI, which accounted for more than 20 percent of the mid-sized car's sales mix in March.
"That's a remarkable rate of adoption" for the segment, Browning said.
Last month's sales increase lifts VW closer to its goal of 800,000 annual U.S. sales for the VW brand by 2018. The company also aims to sell 200,000 Audis in the United States by 2018 as part of its bid to become the leading automaker worldwide.
Higher forecast, caution
Last month, VW raised its 2012 forecast for industrywide U.S. light vehicle sales from 13.7 million to 14 million, based on the strength of the first quarter.
But Browning cautioned about potential headwinds facing the industry in the second half, including fuel-price volatility and buyers being distracted by the election in November. He added: "I think there are a number of factors that will add some level of uncertainty."
In the first quarter, VW-brand sales soared 41 percent to 94,373, while Audi sales rose 16 percent to 29,470. VW Group of America's sales climbed 34 percent to 124,293.
Audi inventory boost
Meanwhile, Audi will see a surge in sales in the second half of 2012, as production and inventories finally catch up with demand.
Johan de Nysschen, president of Audi of America, said Audi will sell at a 140,000-unit annualized pace in the second half of 2012. Through the first quarter, Audi sold 29,470 units, up 16 percent. March marked the 15th consecutive month of all-time sales records.
“We are stretched to the limit,” de Nysschen said in an interview at the IHS/NADA conference in New York. “Our dealers are turning (units) very fast to compensate.”
De Nysschen said the Q7 crossover has a six days’ supply, meaning that two-thirds of Audi dealers have zero inventory of the vehicle.
“Our dealers are very frustrated, but they’ve never sold more than this before,” de Nysschen said. “We’re probably losing sales.”
On the plus side, such little inventory means that transaction prices are almost identical to MSRP.
“Our factories are at capacity, and sales are surging globally,” de Nysschen said. “We are running ahead of projections.”
Mark Rechtin contributed to this report.
