Through the first seven months of 2017, Volkswagen Canada’s sales are slightly lower than they were in 2016. But more recently, after 13 consecutive months of decline and reports of falling sales in 17 of the last 20 months, Volkswagen is showing clear signs of a healthy rebound, nearly two years since news broke that Volkswagen had been cheating on emissions tests with hundreds of thousands of diesel-powered TDI cars.
In June, ending more than a year of decline, Volkswagen’s Canadian sales jumped 30 percent, year-over-year, to an all-time June high of 6,624 sales. That drove Volkswagen’s market share from 2.6 percent in June 2016 to 3.3 percent in June 2017.
But it was July’s results, with the Volkswagen brand jumping 38 percent to an all-time July high of 7,823 sales — only 22 sales shy of Volkswagen’s all-time monthly high — that showed the automaker’s true recovery.
Thank goodness for new SUVs.
Volkswagen is in the midst of launching two all-new utility vehicles: the first-ever Atlas and the enlarged, three-row, second-generation Tiguan, which begins its tenure in August. The two nameplates helped to bring about a 74-percent year-over-year improvement in sales of Volkswagen’s “light trucks” even as the Touareg flagship begins its departure from the North American market.
Fortunately for Volkswagen, after a first half in which the brand’s car sales plunged 9 percent, July volume rose 30 percent. Indeed, utility vehicles aren’t the only reasons for Volkswagen’s major improvements. The Passat and Beetle provided a boost, and Volkswagen’s Golf family rose 63 percent to 3,159 July sales.
That was enough to make the Volkswagen Golf Canada’s fourth-best-selling car in July 2017, up from ninth a year ago. Volkswagen Canada tells Autofocus that wagons – the regular Golf SportWagen and the Alltrack – accounted for 1,358 of the 3,159 Golfs sold in Canada in July.
Regardless of newfound wagon popularity, few would argue passenger cars are the way to future stability in a Canadian market that generates less than a third of its volume with passenger cars, even for a brand like Volkswagen that still generates 78 percent of its Canadian volume via cars. It’ll be the SUV family that counts.
To bolster that lineup, Volkswagen will allow the first-generation Tiguan to hang around as an affordable alternative to subcompact crossovers such as the Subaru Crosstrek and Honda HR-V. In the meantime, July’s Tiguan volume shot to a 14-month high.
It was the best July since 2014, and sales are expected to take off as Volkswagen properly supplies dealers with a Tiguan that’s finally properly sized for the Canadian market—the new Tiguan is 27 centimetres longer than the old model.
The Volkswagen Atlas, meanwhile, opens Volkswagen up to an entirely new section of the market. With three rows (not two like the discontinued Touareg) and a price tag that begins under $40,000 (rather than above $50,000), the Atlas has mainstream intentions that were never even possible with the Touareg. As a result, we’re already seeing a rapid ramp-up of Canadian Atlas volume.
Sales were nearly three times stronger in June than in the May launch month; 7-percent better in July than in June. With 507 July sales, the Atlas easily topped established competitors such as the Buick Enclave, Chevrolet Traverse, Dodge Durango, GMC Acadia, and Mazda CX-9.
If Canadian consumers continue to show passenger car reluctance, these utility vehicles will be increasingly relied upon if Volkswagen is to regain the strength it was displaying prior to the eruption of scandal in 2015. Otherwise, Volkswagen’s Canadian market share will fall in 2017 to the lowest level since the recession.