Volkswagen of America squeezed out a tiny increase in car sales last month despite the ongoing diesel emissions scandal that forced the German auto maker to quit selling several of its diesel models since it admitted in September that it used defeat devices to aid its diesel engines in getting around government emission tests.
But sales data suggest that VW had to cut prices and profit margins to maintain the sales.
A Volkswagen engine is pictured in this file photo.
FILE - In this Oct. 23, 2015 file photo a worker touches the logo of Volkswagen AG on a Phaeton in Dresden, Germany. Volkswagen is reporting a loss of 1.67 billion euros (US dollar 1.83 billion) in the third quarter, Wednesday, Oct. 28, 2015, as earnings took a hit from 6.7 billion euros in set-asides for recalls and fines connected to cars rigged to evade U.S. diesel emissions testing. (Ralf Hirschberger/dpa via AP, file) Top sellers
These were the top selling vehicles in October: 1. Ford F-Series - 65,500 2. Chevrolet Silverado - 51,647 3. Dodge Ram - 40,931 4. Toyota Camry - 34,781 5. Honda Accord - 30,121 Source: Autodata Corp.
Volkswagen Passats are parked in a lot at Village Volkswagen on Tuesday, Sept. 22, 2015, in Chattanooga. Volkswagen has halted sales of 2014 and 2015 diesel Passats and certain other diesel vehicles after the EPA announced Friday that it would order Volkswagen to recall nearly 500,000 vehicles in the U.S. because they were equipped with software that allowed them to evade emissions testing.he Volkswagen brand sold 30,387 vehicles last month, only 74 cars more than a year ago but enough for a fraction of a percent increase in sales.
Sales of the Chattanooga-made Passat jumped a surprisingly strong 24.6 percent from a year ago. VW dealers took delivery in October of 8,116 Passat cars, or 1,603 more than in the same period a year ago.
Volkswagen will begin selling a new version of its Passat by the end of the year and some dealers are beginning to get deliveries of the revised 2016 model.
Most analysts expected VW would suffer a drop in sales after it admitted its diesel vehicles didn't meet federal emission standards on the road. The cars were able to pass emission tests in the laboratory or at testing centers because of software installed in the cars to activate pollution controls when the testing was done, according to allegations by the Environmental Protection Agency. The company has halted sales of its diesel vehicle in the U.S., and the scandal has damaged the brand.
"We would like to again thank our customers for their patience and loyalty," Mark McNabb, chief operating officer of Volkswagen of America, said in a statement Tuesday. "Volkswagen is committed to making things right and actively working to restore trust."
An analysis by car information company Kelley Blue Book found that the average transaction price for new VWs fell 3.6 percent in October from September, when the automaker admitted to federal and California regulators that it had cheated on pollution tests for its four-cylinder diesel engine cars.
"Volkswagen had the largest month-over-month drop as the diesel emissions issue continues to impact the automaker," said Akshay Anand, an analyst for Kelley Blue Book.
He said the automaker is having to lower its prices to sell cars.
VW said Tuesday that pricing for the 2016 Volkswagen Passat starts at $22,440 - the same as the outgoing base model when equipped with an automatic transmission. When new content is factored in, the price for the 2016 model represents a $1,315 value enhancement over the base 2015 Passat.
Volkswagen and other car makers were buoyed by an overall increase in car sales, which were aided by continued low interest rates and gas prices, combined with an improving economy.
Sales of new General Motors cars and trucks rose 16 percent in October, while such sales climbed 15 percent for Fiat Chrysler and 13 percent for Ford. Toyota's sales rose 3 percent, the automaker selling more than 200,000 vehicles for its best October ever. Nissan was up 13 percent, while Honda's sales were 8.6 percent higher than a year earlier.
"October was a huge month for the industry, smashing expectations and continuing its hot streak," said Bill Fay, a group vice president and general manager for Toyota. "Toyota division posted best-ever sales for the month led by October record-breaking sales of Highlander and RAV4."
"Consumers blew the doors off new-vehicle sales in October with numbers echoing back to 2001, when the nation was recovering from Sept. 11, and 'Keep America Rolling' was the industry battle cry, led by GM," said Rebecca Lindland, senior analyst for Kelley Blue Book.
"This October's numbers are driven by a near 5 percent unemployment, deliriously low fuel prices and interest rates near zero," Lindland said.
It is not just sales that are up, but buyers are spending more for the vehicles they buy. Kelley Blue Book data shows the industry's average transaction price was $34,023 for the month, 1.4 percent higher than a year ago.
For automakers with a strong truck and SUV lineup, the average prices are even higher.
"Strong demand for our vehicles provided another double-digit sales increase in October, and Ford vehicles posted all-time record average transaction pricing of $34,600 per vehicle," said Mark LaNeve, Ford vice president, U.S. marketing, sales and service.