Update: e-Golf a ray of hope as VW US sales suffer “dieselgate” fallout
Yesterday Volkswagen of America reported a nearly 25% decline in November sales in the US compared with the same month last year. The drop is being blamed on the emissions-cheating scandal that has shaken the car maker. Sales for the Golf were the hardest hit on a percentage basis, with a 64% drop to 774 units from 2,149 the year before, and the Passat saw its sales fall 60.4% to 2,759 units from 6,966 units during the same timeframe. To add to VW’s woes, Standard & Poor’s downgraded VW one step to BBB+ due to "a tarnished reputation and brand image, reduced business prospects, a more challenging competitive position, substantial costs, and weaker leverage metrics.”   The company also announced that it is recalling 324,000 diesel cars from India. However, there were some bright spots in the otherwise gloomy sales figures, most notably that sales of the electric e-Golf were up 296.6% to 472 units from 119 units in November 2014.

Volkswagen's American depositary receipts fell 1 per cent to $US29.49. They have tumbled 32 per cent this year through Tuesday.

The automaker is trying to boost production of the gasoline-powered cars that it is allowed to sell, but it didn't increase shipments to dealers until the middle of the month.

"I had more cars that I can't sell parked in the back lot than I had in the front lot for sale," said Alan Brown, who co-owns two VW dealerships in the Dallas area and is chairman of the brand's US dealer council. "The factory is still trying to reset production to gasoline cars and that can take three or four months to get inventory in."

Mr Brown said he started the month at one of his stores with just 38 saleable new cars on the lot, about a third of what he would like. VW got more cars to dealers about Nov. 18, but it takes at least a week to prepare the cars for sale and advertise them, he said. He now has 135 vehicles and thinks sales will return to normal levels this month.

Audi of America, a Volkswagen subsidiary that also has models affected by the emissions scandal, said its sales rose 0.4 per cent to 16,700 for a record November in the US.

Combined, VW and Audi US sales fell 16 per cent from a year ago, a steeper drop than the average analyst estimate for a 5.9 per cent decline.

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Porsche sold 4,450 vehicles in November, down from 4,699 from November 2014.

VW has loyal customers, said Karl Brauer, senior analyst with Kelley Blue Book, an automotive research firm in Irvine, California. But buyers may be staying away because they can't purchase the diesel cars that are core to its brand.

"Volkswagen was able to hold off a big decline in sales for a month or two by using discounts but it caught up to them," Mr Brauer said. "Their sales fell 25 per cent and diesel was usually that much of their sales."

It was the wrong month to run low on inventory. Some people may see the emissions crisis as the time to get a deal, but couldn't find what they wanted, said Jessica Caldwell, an analyst with automotive pricing website Edmunds.com. Others may be avoiding the brand until they see how the company responds to the problem.

Volkswagen submitted its recall plan for the 4-cylinder diesel models to the California Air Resources Board and federal regulators on November 20. The company will have to come up with fixes that enable the diesel engines to meet clean-air rules before a nationwide recall is rolled out to affected consumers.

"What they can sell is very limited," Ms Caldwell said. "There were also a lot of sales events from other carmakers going on."

Bloomberg