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VWA to Continue to Push Diesel Advantage

Executive Summary

Diesel-vehicle sales were a hallmark for VW in the U.S. in 2013, with sales reaching 95,823 units, marking the best year ever. “There will be a lot of talk about TDI in coming quarters,” COO Mark McNabb says.

Look for Volkswagen of America to step up marketing centered on its diesel powertrain lineup in coming months, particularly in the case of its Passat sedan, which is losing ground in the highly competitive midsize sedan market.

Speaking with reporters in a conference call to discuss December U.S. sales results for the VW brand, Chief Operating Officer Mark McNabb says the automaker “probably will talk more” about the Passat’s diesel powertrain as a way to drive more interest in the model. Passat deliveries fell 33.5% in December and were down 6.3% for entire 2013.

Diesel-vehicle sales were a hallmark for VW in the U.S. in 2013, with deliveries reaching 95,823 units, marking the best year ever. Buyers snapped up 34,963 diesel-powered Passats, about 32% of total volume for that model, and overall the VW brand controls 70% of the diesel passenger-vehicle market in the U.S.

TDI diesel sales accounted for 17.8% of VW’s total deliveries in December.

Despite the overall volume decline, the U.S.-built Passat has “continued to perform pretty well,” McNabb says. “There’s a lot of pressure in that segment.

“And TDI (diesel) is a great offering,” he adds. “We will move into a different marketing strategy in coming months. There will be a lot of talk about TDI in coming quarters.”

McNabb says VW also expects to offer more attractive lease and financing deals in 2014 and promises the brand’s new marketing strategy will become clearer in the next few weeks as the Super Bowl approaches.

“We will have a lot of messaging around the Super Bowl that will show where we want to go.”

VW-brand sales declined 19.6% daily in December on a volume of 34,015 vehicles (one less selling day this year than last). Most models suffered double-digit drops, including a 34.6% plunge in Jetta Sportwagon sales volume that was blamed in part on availability.

“We just ran out of cars at the right dealers,” McNabb says of the Sportwagon. “It was not overall availability, just the right cars at the right dealers at the right time.”

Total 2013 sales of 407,704 marked the second year in a row volume topped the 400,000 mark.

VWA’s Audi brand posted its fourth straight record sales on a volume of 158,061, topping 2012 by 13.5%. The year was capped by a strong December, which saw delivery of a record 17,013 units, up 19.2% from the previous high set in 2012.


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