October Auto Sales Show VW Gaining on Japanese Brands’ Weakness

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The brand that might be taking biggest advantage of the challenges facing Toyota and Honda in the U.S. market isn’t from Detroit — it’s from Wolfsburg.

Volkswagen keeps rolling up huge sales increases in America this year, today reporting a whopping 40% jump in October sales over a year ago. In fact, on the last day of October, VW already surpassed its U.S. sales total of about 264,000 for all of 2010.

Sales for the entire U.S. auto industry in October strengthened modestly from September on a seasonally adjusted basis.

“We hit it out of the park” in October, Jonathan Browning, CEO of Volkswagen of America, commented on a call with reporters this morning. “Clearly it’s an impact of having strong products in the marketplace offering great safety, quality and value.”[more]

He noted that VW achieved its sales gain despite beginning the month with a tight 31-day supply of vehicles, according to Autodata, while he said that Toyota, Honda and Nissan had 34, 34 and 38 days’ supply available at the start of October. “We went into the month relatively lean on inventory yet managed to achieve tremendous growth and maintain our momentum,” Browning said.

The best news for VW, however, is that its new-product pipeline is just now disgorging two new vehicles that it expects to be among its highest-volume U.S. models going forward. Its brand-new, lower-priced, U.S.-built midsize sedan, Passat, sold more than 5,000 units last month. The 2012 Beetle, also recast with more male-friendly styling and features, also has begun selling in volume. And the third leg of VW’s stool of volume nameplates, Jetta, sold 9 percent more units in October than a year earlier.

Meanwhile, Toyota and Honda continued to suffer in October, with a 4-percent sales decline and flat sales, respectively, compared with a year ago. Toyota continued to be dragged down from leftover supply problems because of the March natural disaster in Japan (and lower SUV and truck sales), while Honda is bracing for another huge North American production cut in coming months becaues of the flooding of supply chains in Thailand.

Still, Browning insisted that VW isn’t becoming overly opportunistic. “I wouldn’t say we’re making any adjustments” based on the continuing problems of its main Japanese rivals, he said. “We’re plowing our own furrow in terms of our products and our go-to-market status. We’re satisfied with the momentum we’re building and we’ll continue to do that. We’ll manage the competitive environment as we go forward.”

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