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VW Loses Sales, Stock Prices Rise

(Credit: Volkswagen)

Car Recalls

VW Loses Sales, Stock Prices Rise

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Volkswagen badge (Credit: Volkswagen)

With third quarter numbers in, Volkswagen took a beating. The automaker saw its first quarterly dip in sales figures, thanks at least in part to the Dieselgate scandal that has not only tarnished the company’s image, but also put a halt to the sale of TDI models. Despite those results, the company sold enough to convince investors that all will be well, producing a spike in stock prices.

That might seem like a contradiction to some people, but after GM has successfully navigated a recall scandal, followed by a huge wave of recalls, investors obviously feel that Volkswagen can make it through Dieselgate without taking too much damage. Their optimism might be premature, because the scandal came out late in the third quarter, which could be the reason why sales totals weren’t worse.

Even though VW is no longer the largest automaker in the world, it reported a healthier operating profit for each of its major car brands: Volkswagen, Audi, Porsche and Skoda. According to a report from Fortune, this was made possible by a combination of a weakening euro, cost-cutting measures taken by the company and the introduction of some new models that are appealing to car shoppers.

Also important, as Fortune pointed out, is that Volkswagen is flush with cash right now. That cushion will help the automaker weather the Dieselgate storm. With these new financial details coming to light, questions about VW having to dump prestige brands to keep afloat might be put to rest. Of course, nobody really knows just how badly Volkswagen’s image has been damaged with car shoppers, and how much sales will really dip for the fourth quarter.

As of the writing of this article, Volkswagen AG’s stock prices were down slightly, but not as much as rival Toyota’s. Economic problems in China, Brazil and Russia have fueled some instability among automakers, since those markets have been key growth areas up until recently.

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