Emissions scandal takes its toll on Volkswagen sales but company still plugging away at the plug-ins

Volkswagen finally seems to be feeling the pain of its diesel deception in falling sales. Global sales for the VW brand fell by 4.7 per cent in February compared with the same period in 2015. Overall North American sales were down by 6.7 per cent, but specifically in the US they were 13.2 per cent down.

There were even worse results in South America, especially as the continent had once been a Volkswagen heartland: sales were down 30 per cent in February across the region. There was a drop in sales of almost 40 per cent in Brazil.

China and Russia were less disastrous, with drops of 3 per cent and 7 per cent respectively.

Last week the firm announced that Michael Horn, president and chief executive of Volkswagen Group of America, was stepping down nearly six months after the German carmaker admitted to installing software designed to cheat emissions tests in thousands of its cars.

Horn, who has been president and chief executive since 2014, is leaving “to pursue other opportunities effective immediately”, the company said.

Positive territory

However, in European markets, Volkswagen actually rallied with sales up by 6.8 per cent between western and eastern

Europe

. Even in

Ireland

, where the brand’s market share has slipped – pushing it from first to fourth in the sales table – volume sales are up nearly 12 per cent. That’s behind the overall market growth but still in positive territory.

A partially relieved sales and marketing chief, Jürgen Stackmann, said: “Our customers remain loyal to us in a challenging period.” VW is now hoping that the imminent launch of the much-awaited new Tiguan SUV will give it a significant sales boost.

VW's subsidiaries are also having a mixed time of it. Audi's sales in February were up by 3.3 per cent but it saw BMW and Mercedes race out of reach in the global battle to be the world's largest premium carmaker as they posted February gains of 7.9 per cent and 11.8 per cent respectively.

VW also does not intend to get left behind in the electric car race. With talk in Geneva of a new compact, affordable Golf-style model with a 500km battery set-up, VW is now making noises about developing a platform to create a new series of hybrid and plug-in hybrids.

Speaking to the UK's Auto Express magazine, VW's boss Dr Herbert Diess said: "If you look further, then it's probably worthwhile thinking of an entirely new architecture because then you can let go of the technical components you put in the car because of the combustion engine. You gain a lot of space in the interior, for instance."

The new platform is expected to make its debut under a new Prius-rivalling hybrid, for which a fuel consumption figure of 94mpg is already being spoken of.

VW has also committed to making its new electric and part-electric line-ups more affordable than previously.

“Cars with all-electric ranges of over 500km are feasible by the end of the decade. Charging will only take as long as a coffee break. And in the long term, an electric car will cost less than a car with an internal combustion engine,” said VW Group chief executive Matthias Müller.