According to data released by the European Automobile Manufacturers’ Association (ACEA), new car registrations in western Europe grew by 4.6% year on year in November. For the first time since the Dieselgate scandal broke in September 2015, Volkswagen Group's market share increased in the region, from 24.0% in November 2015 to 24.1% a year later. However, at 23.5%, the group’s share of the western European car market in the first 11 months of 2016 is still one percentage point lower than for the period covering January-November 2015.
Nevertheless, it is noteworthy that the recovery in the Group’s share in November is essentially due to the Audi and SEAT brands. Registrations of the core Volkswagen brand actually fell year on year in November, albeit by only 0.3%, and therefore continued to underperform the market. The Volkswagen brand had a market share of 11.8% in November 2016 compared to 12.4% in November 2015. This is not entirely surprising given the ongoing woes faced by Volkswagen as the fallout from Dieselgate continues, including the possibility that the company will be sued in the UK.
However, the greatest challenge that the Volkswagen Group still faces is the call for compensation for European buyers, especially following the settlement approved in the US between Volkswagen and over half a million customers and the federal government. Given that 8.5 million of the 11 million cars affected by the emissions scandal were sold in Europe, the prospect of paying out compensation is incredibly daunting. The Volkswagen Group may have a lifeline though as the main grounds for the compensation claims are the loss in value of the affected cars and new analysis by Autovista Intelligence's sister division Schwacke reveals that the residual values of the cars fitted with defeat devices are actually holding up in Germany and this trend is replicated across Europe.
The index of residual value development, starting on 25 September 2015, shows that residual values for Volkswagen diesels were lower for the first few months after the emissions scandal broke but had recovered to their pre-scandal level by March 2016. Since then, Volkswagen diesel models have actually gained more in value than diesels overall. The residual values of petrol-driven Volkswagen cars have consistently performed better than the total stock of used petrol cars and, since late September 2016, have been more than 10% higher than the index base of 25 September 2015. The index is calculated based on daily observations of prices for cars that are approximately three years old and with typical mileage for their fuel type.
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