German carmaker Volkswagen's India unit has seen its domestic sales decline for the fourth consecutive year in 2015, with its market share slipping to 1.5 per cent. The company has had a steady start to the year and clocked a 17 per cent jump in sales in the eight months ended August 2015. The growth trend, however, reversed from September as the global emission scandal came to light.
Volkswagen admitted it had installed software that cheated emission tests in 11 million diesel cars worldwide.
Volkswagen saw four consecutive monthly declines beginning September and its September-December 2015 domestic sales slipped by a steep 34 per cent, while most of its peers continued to grow volumes. The company's calendar year 2015 sales declined 2.4 per cent to 43,152 units, the lowest in the past five years. The sector's sales, however, grew by eight per cent in 2015.
"The negative news flow related to Volkswagen globally and within the country is fresh in the minds of the people. There is a visible decline in demand for the company's products across the world," said an automobile analyst. Globally, Volkswagen had sold a record 10.1 million units in 2014. In the first half of 2015, it also overtook Toyota as the world's largest player by volumes. However, that changed in the later quarters of 2015. Volkswagen's 2015 global volumes declined two per cent in 2015. Other than the emission issue, slowing demand from markets such as China also impacted volumes. Toyota is yet to declare 2015 numbers at a global level.
In India, the firm has decided to recall 323,700 vehicles but stated these cars were not fitted with a 'defeat device' and the 'voluntary recall' of cars has been done to "be in line with the latest technical updates". Earlier, a sample test of Volkswagen's on road vehicles by Automotive Research Association of India found them to emit five to nine times more NOx (mono-nitrogen oxides) compared to the emission during laboratory testing.
Volkswagen has a vehicle manufacturing plant in Chakan near Pune. It had invested Rs 3,800 crore in this plant, which became operational in 2009. The plant currently has an annual capacity to produce 130,000 vehicles. Apart from catering to domestic demand, Volkswagen also exports a large number of vehicles to markets such as Mexico. Exports are more than domestic sales and volume is estimated to have grown in 2015.