Volkswagen brand chair Herbert Diess introduces the ID Buzz concept van Scott Olson, Getty Images

Volkswagen brand chair Herbert Diess introduces the ID Buzz concept van at the North American International Auto Show in Detroit.

Despite Dieselgate, VW Sales Top New Record

Deliveries soared 12% in China and grew about 4% in Europe, but sales dropped close to 3% here in the United States and plummeted almost a quarter in South America.

FRANKFURT AM MAIN, Germany — Volkswagen sold 10.3 million cars worldwide last year, a new record for the German auto giant, despite grappling with a massive emissions cheating scandal.

The VW group, which also includes the brands Audi, Porsche and Skoda, saw sales increase by 3.8% on the year, pushing it back over the magical 10-million mark after slipping to 9.93 million in 2015.

The results come as the company’s “dieselgate” crisis is back in the spotlight following the arrest this week of a VW executive in Miami who stands accused of helping to cover up the scandal. The scandal erupted, of course, back in September 2015, when Volkswagen, under pressure from U.S. authorities, admitted to installing software in 11 million diesel cars worldwide that could dupe pollution tests.

The cheating technology allowed the cars to pass the emissions tests but release up to 40 times the permitted amounts of nitrogen oxides during actual driving. The scandal harmed Volkswagen’s reputation and sent its share price plunging, but customers appear to have largely shrugged off the controversy.

Volkswagen has responded to the crisis with a management shake-up and by shifting its focus to clean-energy vehicles, setting out to be the world’s leader in electric cars by 2025.

“2016 was a very challenging year for us. We made strides in resolving and overcoming the diesel crisis and at the same time initiated a fundamental change process,” CEO Matthias Mueller said in a statement.

Group sales were driven by strong growth in China, where deliveries were up 12%. Europe saw growth of 4%. In the United States, where customers have taken mass legal action to secure compensation from Volkswagen, sales were down 2.8% over the year. In South America, sales plummeted by nearly a quarter.

Overall, VW’s flagship own-brand cars were the group’s most popular with sales up 2.8% to reach nearly 6 million units in 2016.

Strong performances by Skoda as well as luxury brands Porsche and Audi also helped drive the group to its record result.

Volkswagen’s main global rival Toyota has yet to announce its full-year figures, but last month it said it expected sales of 10.09 million vehicles for 2016 — which would put it in second place behind VW.

The VW group has set aside some 18 billion euros ($19.04 billion) to cover the fallout of the dieselgate scandal, but experts believe the final bill for the buy-backs, fixes and legal costs will be far higher.

In the United States alone, the carmaker has already agreed to spend nearly $16 billion to settle civil claims, including an agreement to provide compensation for nearly half a million owners of the affected cars. The company is also reportedly nearing a $2 billion settlement with U.S. authorities to resolve a criminal probe.

Volkswagen faces a web of legal complaints in Europe as well, but it has so far resisted calls to offer compensation to drivers there.

As part of its post-dieselgate revamp, VW in November said it planned to sell 1 million electric cars per year by 2025. It also announced it would be slashing 30,000 jobs by 2020, while ramping up investment in new technologies such as self-driving cars.

By Michelle Fitzpatrick

Copyright Agence France-Presse, 2017

TAGS: The Economy
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