Bloomberg News

VW’s Sales Growth Slows in January as China, Europe Contract

February 19, 2012

Feb. 17 (Bloomberg) -- Volkswagen AG, Europe’s largest carmaker, reported slowing growth in global deliveries last month as sales in China and Europe contracted.

VW registrations rose 1.3 percent in January to 652,500 vehicles, the Wolfsburg, Germany-based carmaker said in an e- mailed statement today. Sales in China, VW’s biggest market, dropped 4.5 percent and European deliveries fell 1 percent.

“2012 will be a challenging year,” sales chief Christian Klingler said in the statement. “The prevailing economic uncertainty is impacting the automotive industry. We will continue to keep a very close eye on the market situation, particularly in Europe.”

Passenger-vehicle deliveries in China, the world’s largest market, dropped the most in more than seven years last month after an earlier-than-usual Lunar New Year holiday season deprived dealers of a week’s worth of sales and the economy shows signs of cooling. Automakers expect the European car market to contract in 2012 for the fifth straight year as the region’s sovereign debt crisis discourages purchases.

“If China is a little bit weak, it can be explained by the difference in the Chinese New Year,” said Adam Hull, a London- based analyst at WestLB who recommends buying Volkswagen stock. “They’ve also still got low inventories in China, with heavy discounting from competitors, so because inventories are low they’ve not had to react to that.”

European Slide

Chinese deliveries of passenger automobiles, including multipurpose and sport-utility vehicles, dropped 24 percent from a year earlier to 1.16 million units last month, the China Association of Automobile Manufacturers said last week. Sales were projected to drop 18 percent, according to the median of a Bloomberg News survey of five analysts.

European auto Registrations in January fell 6.6 percent to 1 million vehicles, marking the fourth consecutive monthly decline, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said yesterday in a statement.

Volkswagen’s sales gain for the month came on the strength of demand in the U.S., where the automaker’s deliveries surged 40 percent to 36,700 vehicles. It was VW’s best January in the market since 1974.

--With assistance from Alex Webb in Paris. Editor: Chris Jasper.

To contact the reporter on this story: Chad Thomas in Berlin at cthomas16@bloomberg.net

To contact the editor responsible for this story: Chris Jasper at cjasper@bloomberg.net


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