A year after emission crisis, Volkswagen recovers slowly

German auto major Volkswagen, which was hit by the global emissions scandal a year ago, is showing signs of revival in India sales, thanks to its new model, Ameo.

The first sub-four metre compact sedan in the country, has contributed over 50 per cent to Volkswagen’s sales in the country in July and August. It sold 2,200 units of Ameo in July and another 2,427 units in August.

The company has posted growth in sales during July and August, though cumulative volumes are lower for the April-August period. And, the company’s growth is also lower than the sector. Against a double-digit growth of the passenger vehicles in the first five months of FY17, Volkswagen’s sales in the country are down three per cent.

In the corresponding period last year (April-August), the company had registered an impressive growth of over 23 per cent, several times higher than the industry’s seven per cent growth. However, things took a turn in September last year and the company posted a 21 per cent decline in the same month after the scandal came to light. Sales continued to decline for next several months. Against an eighth position in the Indian market last year, the company has slipped to the tenth slot.

In September 2015, the company admitted it had installed software that cheated emission tests in 11 million diesel cars worldwide. In India, the firm decided to recall 323,700 vehicles but stated these cars were not fitted with a ‘defeat device’ and the ‘voluntary recall’ of had been done to “be in line with the latest technical updates”.

The initial three months (after the emission crisis) were difficult for Volkswagen India, said a company spokesperson. “However, the previous months of calendar year 2015 were very strong and ultimately we ended the year with a comparable performance to 2014. This year, the sales have recovered and were stable till July. In the last two months, we have seen a positive growth with increase in sales over previous year’s corresponding months owing to our new carline, Ameo.”

Volkswagen Group has received the first approvals for updating the first sets of cars with 2.0-litre and 1.5-litre EA 189 diesel engines and will initiate the activity soon. The company has also seen a decline in diesel volumes due to the emission problem and the overall market shift towards petrol.

“We are aiming for a sustainable growth with Ameo. We want to add representation in 10 to 20 additional cities in the coming months,” the spokesperson said.

On the dealership front, the company said it is continuously working on several aspects of improving customer satisfaction for sales as well as after sales experience.