VW CEO Expects US Auto Sales to Jump Up to 30% in May
Volkswagen Group of America’s chief said US new car sales could rise 20 to 30 percent year-on-year in May 2012, citing a solid industry recovery despite slow economic growth.
US new car sales could surge by 20 to 30 percent in May 2012 compared to the same month last year, according to Volkswagen Group of America CEO Jonathan Browning. Speaking at an Automotive Press Association event, Browning described the recovery as “steady” and “solid”, though he cautioned that the increase may not reach the most bullish forecasts.
Volkswagen initially expected a 20 percent rise, but Browning acknowledged that May’s results were likely to beat that figure, though probably not exceeding 30 percent. His comments came ahead of official industry data for the month, which was due the following day.
Analyst forecasts and brand performance
Industry analysts at Kelley Blue Book projected nearly a 30 percent year-on-year increase for May, estimating sales of around 1.38 million vehicles. That would represent the strongest monthly gain in over a year, though the annualised selling rate would remain at 14.2 million vehicles, matching January’s pace, the lowest of 2012 so far. Edmunds.com’s estimate was slightly higher, at 1.39 million vehicles and a 14.4 million annual rate.
Japanese brands were expected to see the sharpest rebounds in May. Edmunds.com forecast Toyota’s US sales would nearly double year-on-year, up by almost 90 percent, with Honda also predicted to post a gain of nearly 50 percent. Both companies had been severely affected by the 2011 earthquake and tsunami in Japan, which disrupted production and inventories for much of the previous year.
- Kelley Blue Book: 1,378,000 vehicles, 14.2m annual rate
- Edmunds.com: 1,391,163 vehicles, 14.4m annual rate
- Toyota: nearly 90% projected May sales increase (Edmunds)
- Honda: nearly 50% projected May sales increase (Edmunds)
Volkswagen’s US challenge
For Volkswagen, the challenge remains converting brand familiarity into actual sales. Browning pointed out that many US consumers associate Volkswagen with older models such as the Beetle, rather than the current line-up. The company aims to improve awareness of its broader range as it seeks to expand its American market share.
Context: Economic recovery and market outlook
The US auto market’s recovery in early 2012 came despite modest economic growth and a still-weak housing sector. The US Commerce Department reported GDP growth of just 2.2 percent in the first quarter. Nevertheless, the car market’s momentum was expected to continue, with May’s projected gains outpacing those seen in other major markets such as Canada, where sales had barely risen in March (see Canada’s March Auto Sales Inch Up Just 0.2% Amid Harsh Weather).
