Volkswagen avoids setback with hefty deals

WASHINGTON -- Volkswagen of America, helped by fatter discounts, recorded a tiny U.S. sales gain last month even as its compact car deliveries were gutted by an ongoing sales ban on 2.0-liter diesel models and overall weakness in car demand across the industry.

The embattled German brand sold 30,387 vehicles in the U.S. in first full month since its parent company’s emissions scandal erupted, representing a 0.2 percent gain from October 2014. Heavy incentives helped VW avoid a collapse in volume but the brand is expected to lose market share as the industry motors towards a seasonally adjusted annual sales rate of 18 million or more for the month.

“We would like to again thank our customers for their patience and loyalty,” Volkswagen of America COO Mark McNabb said in a statement. “Volkswagen is committed to making things right and actively working to restore trust.”

Sales of the Golf hatchback fell 53 percent and the volume-leading Jetta sedan posted a decline of 42 percent. The drops reflect the loss of diesel sales; VW’s 2.0-liter TDI models are grounded amid negotiations with the EPA over emissions requirements. Sales of gasoline-powered Golf and Jetta models also declined last month, according to a VW spokeswoman.

VW ramped up incentive spending to spark showroom traffic last month. Per-unit incentive spending jumped more than 50 percent from Oct. 2014 to a forecasted $4,046 per vehicle, according to TrueCar.

VW’s October spiffs included discounts of $2,000 for repeat VW buyers, low- or no-interest financing and low-payment leases. VW also offered hefty dealer-cash bonuses of up to $2,750 for gasoline Passat midsize sedans, $2,250 for gasoline Jetta compacts and up to $2,750 for the Tiguan compact crossover.

The surge in spiffs helped lead other VW nameplates to big gains. Passat midsize sedan sales jumped 25 percent, GTI hot-hatch volume rose 46 percent and Tiguan compact crossover deliveries more than doubled to 4,815 vehicles, its best month on record, VW said.

The overall Golf family, which includes the hot-selling GTI, benefitted from the addition of the Golf R, e-Golf and Golf SportWagen models. The family’s sales rose 40%.

VW’s 10-month U.S. sales now total 294,602, down 2.2 percent from the same period last year.

Audi continues to roll

Audi continued its red-hot pace with sales jumping nearly 17 percent to 17,700 for its 58th-consecutive monthly U.S. volume record, the brand said. Audi’s U.S. sales have increased 72 consecutive months year-over-year.

A 31 percent gain in crossover sales drove Audi’s October results. Q7 midsize CUV sales grew 21 percent, while Q3 subcompact sales rose 30 percent and the Q5 compact posted a 36 percent jump.

“Establishing continuous sales records is the result of our long-term strategy to consistently raise the Audi profile and steadily develop new products, alongside the dedication and hard work of our dealer partners,” Audi of America COO Mark Del Rosso said in a statement. “As we enter the holiday selling season, we remain optimistic that our Season of Audi Sales Event will trigger demand across all model lines to close out the historic year of 2015.”

Sales of the A3 TDI powered by the 2.0-liter diesel implicated in the VW Group’s emissions scandal seemed largely unaffected by the ban on sales. A3 volume gained 15 percent to 2,732 vehicles.

Audi, in a statement detailing October sales results, made no mention of the EPA’s announcement Monday that several 2016 Audi models powered by its 3.0-liter diesel engines allegedly contained “defeat device” software that masked higher emissions than permitted by U.S. clean air laws. The affected Audi models include the A6 Quattro, A7 Quattro, A8 and Q5 diesels.

The VW Group on Monday denied it had installed illegal emissions software in the vehicles. An Audi of America spokesman said, “Our engineers want to meet with EPA and CARB to learn about the data that led to the agencies’ conclusion.”

Through ten months, Audi’s U.S. sales total 165,103 vehicles, up 13 percent from the prior-year period and surpassing its full-year sales from 2013.