Volkswagen’s emissions scandal destroyed its November sales in the US

Image: Reuters / Joshua Roberts
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Volkswagen’s November US sales crashed 25% from the previous year, the automaker said today (Dec. 1). The dismal performance comes two months after the company was caught cheating on emissions tests by US regulators, plunging it into one of the biggest auto scandals in history. In the US, nearly 500,000 diesel-powered cars have been affected; globally, the number of affected vehicles could reach 11 million.

Volkswagen said in a statement that the sharp drop-off in sales reflects two “voluntary stop-sales” that were “issued in light of notices received by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) regarding emissions compliance.” Also today, Standard and Poor’s cut Volkswagen’s credit rating a notch, from A- to BBB+, on “a tarnished reputation and brand image, reduced business prospects, a more challenging competitive position, substantial costs, and weaker leverage metrics.”

November’s US results are especially painful for Volkswagen because they undo the small amount of progress the company was making in America. After struggling to crack the US market and posting big sales declines throughout 2014, Volkswagen this past spring and summer finally generated some positive momentum. US sales rose 8% in May, 5.6% in June, and 2.4% in July. Even the essentially flat results of September and October were a comparative improvement.

Since Volkswagen’s emissions scandal was uncovered in September, the company has made several attempts to prop up sales. It’s sweetened incentives for dealers, and nearly doubled discounts for US buyers. That might help explain why, for the month of October, Volkswagen’s US sales didn’t look that bad. Whatever the reason, the impact of the company’s blunder is now readily apparent in its numbers.