Global sales of Volkswagen branded cars dropped nearly 20 per cent last month as the marque struggled with new emissions standards in Europe and trade war woes pulled down sales in China, its largest market. In Europe, VW deliveries fell 42.6 per cent from a year ago to 91,100 cars, underscoring the challenge it faces to certify its cars to new emission standards, the “worldwide light vehicles test procedure”, or WLTP, which took effect on September 1.The shift has caused big fluctuations as carmakers must obtain approval for all variants of the cars they sell, forcing them to perform a myriad number of tests.This year Volkswagen estimated the cost of certifying cars under the new procedure at more than €1bn. The steep fall in Europe caused global deliveries to slide 18.3 per cent last month, to 485,000 cars. In VW’s home market, Germany, the WLTP effect was “massive,” the company said, with deliveries falling 47.1 per cent to 23,300 cars.
Global sales of Volkswagen branded cars dropped nearly 20 per cent last month as the marque struggled with new emissions standards in Europe and trade war woes pulled down sales in China, its largest market. In Europe, VW deliveries fell 42.6 per cent from a year ago to 91,100 cars, underscoring the challenge it faces to certify its cars to new emission standards, the “worldwide light vehicles test procedure”, or WLTP, which took effect on September 1.The shift has caused big fluctuations as carmakers must obtain approval for all variants of the cars they sell, forcing them to perform a myriad number of tests.This year Volkswagen estimated the cost of certifying cars under the new procedure at more than €1bn. The steep fall in Europe caused global deliveries to slide 18.3 per cent last month, to 485,000 cars. In VW’s home market, Germany, the WLTP effect was “massive,” the company said, with deliveries falling 47.1 per cent to 23,300 cars. Sales head Jürgen Stackmann emphasised that the problem is only temporary. The VW brand sold more than 4.62m cars globally from January through September — 2.9 per cent more than last year — placing 2018 on track for a record year.“Developments in September were a setback, but we had been expecting this following the records in the summer,” he said. “October will also be affected by the changeover to the WLTP test procedure. From November, we will be ready for the end-of-the-year sprint.” Carsten Brzeski, chief economist at ING-DiBa, said it is a credible claim that these are just temporary, supply-side problems rather the harbinger of something to come. “Given that we haven't seen lots of market share losses in the overall standing of the Germans in the car industry, I'm pretty relaxed,” he said. “There are so many risks out there, but the status quo is still strong. This is just a bit of a short-term bump.” Germany’s auto industry lobby, known as the VDA, noted last week there would be a “backlash” following a surge of sales in August, just before new regulations took effect.In Germany, the VDA said, vehicle registrations jumped 25 per cent in August, from a year before, before dropping 31 per cent in September. From January to September, however, registrations were up 2 per cent.Still, the costs involved in WLTP are a problem for investors, who are already concerned about the amount of cash carmakers must deploy to make the shift to electric cars that drive themselves and are shared among users.Despite the VW brand reporting record sales for this year, shares of its parent group are down 23 per cent from the January peak.Meanwhile, Volkswagen blamed an escalating trade war for why deliveries in China fell 10.5 per cent to 277,800 cars. It cited “marked general uncertainty among consumers in the country as a result of the continuing tariff dispute with the USA.”The VW Group is set to release figures for all 12 brands, including Porsche, Seat and Skoda, on Friday. Audi, VW Group’s most profitable unit, already reported a European sales decline of 56 per cent last month.