U.S. sales help Volkswagen results race forward

U.S. sales help Volkswagen results race forward

April 27th, 2012 by Mike Pare in Business Around the Region

Aerial image shows new Volkswagen Passats in the parking of the VW plant at Enterprise South.

Photo by Dan Henry /Times Free Press.


The number of days it took for a VW vehicle to sell in the U.S. after it arrived at a dealership was 41 in the first quarter, down from 59 days a year ago, according to Edmunds.com.

Bolstered by rising U.S. market share, Volkswagen AG reported Thursday that global sales revenues climbed 26.3 percent in the first quarter over a year ago.

"Particularly strong demand was recorded for the Passat" in the U.S., the company said in an earnings report Thursday.

The German automaker said VW outperformed the overall American car market with a 34 percent jump in sales in the quarter.

VW reported it sold more than 124,000 vehicles in the U.S. in the period, and its share of the market grew to 3.6 percent from 3 percent.

Michelle Krebs, senior analyst for Edmunds.com, said in a statement that the U.S. results show "the Germans really mean business." VW has aggressive U.S. sales targets of 800,000 vehicles by 2018 and a million vehicles by 2020, she said.

Krebs said that what may be most impressive is that Volkswagen increased its average transaction price 1.7 percent, even as incentives grew nearly 5 percent in the quarter.

Jonathan Browning, Volkswagen Group of America's chief executive, said in Chattanooga last month that one of every four VWs sold in the U.S. is a Passat.

The German automaker said it's adding 1,000 jobs this year at its Chattanooga plant, where it makes the midsize sedan, putting the headcount at about 3,500.

On Thursday, Volkswagen reported its operating earnings worldwide jumped 10 percent to $4.2 billion in the quarter over a year ago.

VW posted its strongest growth in the U.S., Russia, China and India, according to the automaker. Sales in Russia were 77 percent higher, the company reported.

In North America, sales revenue was up $1.7 billion to $7 billion, the company reported.

VW reiterated its forecast that sales revenue globally will exceed the prior-year figure.

Despite the ecnomic slowdown in Europe, VW chief executive Martin Winterkorn said in a statement that, "I'm still convinced that the Volkswagen Group can approach the coming months with confidence."