Volkswagen AG, Europe’s largest automaker, said “very weak” global car markets aren’t yet recovering, even as the company’s sales rose in May for the first time in eight months thanks to government incentives.
Deliveries at Volkswagen’s namesake brand increased 10 percent to 351,000 cars and sport-utility vehicles in May from 318,500 a year earlier because of gains in Germany and China, the Wolfsburg, Germany-based company said today in a statement. Declines at the Audi, Seat and Skoda divisions narrowed the group increase to 1.5 percent, with sales of 556,700 vehicles.
“We have to some extent been able to uncouple ourselves from an overall market that remains very weak” because of new models and used-car prices that aren’t declining, Detlef Wittig, group sales chief, said in the statement. “With the exception of China, global passenger-car markets are not showing any signs of recovery” and may not have “hit rock bottom yet.”
Auto markets have contracted by about 20 percent this year because of the recession, according to Volkswagen. In Germany, where the government has bolstered demand by offering 2,500 euros ($3,500) to buyers who trade in models older than nine years, deliveries surged 40 percent in May, according to the federal motor vehicle office. Volkswagen group sales in its home market climbed 36 percent to 127,100 vehicles.
China’s car market has expanded after the government offered subsidies to drivers in rural areas and cut retail taxes as part of a wider 4 trillion-yuan ($585 billion) economic stimulus plan. Volkswagen delivered 119,200 cars in China, 45 percent more than a year earlier.
Volkswagen fell 6.70 euros, or 2.6 percent, to 247.90 euros in Frankfurt trading. The stock has declined 0.8 percent this year, valuing the company at 78.5 billion euros.