VW sales are a disaster

The Volkswagen logo is seen on a Volkswagen XL Sport car during the media day at the Paris Mondial de l'Automobile, October 3, 2014. REUTERS/Jacky NaegelenThomson ReutersThe Volkswagen logo is seen on a Volkswagen XL Sport car during the media day at the Paris Mondial de l’Automobile

Volkswagen, one of the world’s biggest car-makers, is struggling.

VW said on Wednesday sales at its core passenger-car division fell 2.8 per cent in January, with demand declining in Europe, China and Latin America.

Deliveries slipped to 507,100 autos worldwide from 521,600 a year earlier, the Wolfsburg-based manufacturer said. Sales data for the multi-brand group are expected to be published later this week.

Volkswagen’s luxury Audi brand, by contrast, has been posting great sales, beating out German rivals Mercedes and BMW.

A significant portion to VW’s sales woes can be placed on its difficulties in North America. While automakers with meaningful market share in the US and Canadian markets have benefitted from booming car sales in these regions, VW has actually seen its sales slip.

The automaker has very modest market share in the US, relative to its presence in other global markets, which have been roiled in recently months.

VW also has the wrong product mix in the US. Sales of large SUVs, trucks, and compact SUVs have led the way for many automakers in the US, and while VW is selling compact SUVs in North America, the vehicles have largely failed to connect with consumers.

(Reuters reporting by Andreas Cremer; Editing by Maria Sheahan)

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