Photographer: Miles Willis/Bloomberg

Volkswagen Europe Market Share Continues Drop Amid Recalls

  • Industrywide European car sales jumped 14% in February
  • Fiat, Jeep, Mercedes SUVs, Opel Astra attract region's buyers

Volkswagen AG lost market share in Europe for the sixth month in a row as the German carmaker’s diesel-emissions scandal pushed buyers to the likes of Fiat Chrysler Automobiles NV, Mercedes-Benz and Ford Motor Co.

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Volkswagen’s brands accounted for 24 percent of new auto registrations in February versus 25.4 percent a year earlier, the European Automobile Manufacturers’ Association, or ACEA, said Wednesday in a statement. Industrywide sales jumped 14 percent to 1.09 million vehicles, while two-month registrations increased 10 percent to 2.19 million autos.

The German company is recalling 8.5 million diesel cars in Europe to fix engines designed to cheat on emissions tests. Sales growth at the VW brand was only about one-third of the industrywide increase in February, and its deliveries have lagged behind the market’s gains since the scandal came to light in September. The main beneficiaries were Ford, Fiat and German luxury-car producers Mercedes and BMW AG, bolstered by sport utility vehicles.

“Even with the diesel scandal, at least the German premium brands are performing well to very well,” Peter Fuss, a partner at consulting company EY, said in a report. “Manufacturers know, however, that times are getting tougher, with economic and political risks greater this year than last. Volatility in all markets is getting stronger.”

European registrations at Volkswagen rose 7.7 percent, held back by a decline at the Seat division and lower-than-average growth at the VW and Porsche marques. Growth exceeded 14 percent at the Audi and Skoda nameplates. The German carmaker was pleased that the impact on its namesake brand has been limited, with Juergen Stackmann, head of the division, saying last week that customers are remaining “loyal to us in what is a challenging period.”

Carmakers’ Discounting

With the industrywide expansion in February, the European car market has grown for 30 consecutive months. Demand is recovering from a two-decade low in 2013. Gains last month were bolstered by low interest rates, discounting by manufacturers and cheaper fuel, as well as by an extra sales day in February because of leap year.

The Fiat 500X crossover and the related Jeep Renegade helped Fiat Chrysler’s European sales surge 22 percent in February, pushing the Italian-U.S. company’s two-month registrations ahead of Ford’s, which normally ranks fourth in the region’s deliveries.

Daimler AG’s Mercedes, which is on track to overtake BMW as the world’s biggest luxury-car brand this year, registered 21 percent more autos in Europe last month. The BMW nameplate’s European sales jumped 15 percent. SUVs were the models posting the strongest global delivery growth at both German competitors in February, according to figures released this month.

General Motors Co.’s Opel and Vauxhall brands posted an 18 percent gain. The twin nameplates said earlier this month that sales of the new Astra hatchback, which won the regional Car of the Year award in late February, surged 84 percent.

Carmakers offering the best deals in Germany last month were French manufacturers PSA Peugeot Citroen and Renault SA, with an average 14 percent off the sticker price, and the Fiat brand, with discounts of 13.2 percent, according to trade publication Autohaus PulsSchlag. Industrywide, German rebates widened last month to an average 12.3 percent off the list price from 12.1 percent in January and 12 percent a year earlier.

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