Volkswagen scandal: German carmaker's UK sales fell by 20% in November

Volkswagen UK sales fell by a fifth in November, according to the Society of Motor Manufacturers and Traders (SMMT). The society found that only 12,958 VW vehicles were sold in November 2015, in the wake of the emission tests scandal. In 2014, the German car manufacturer's brand was the third highest-selling in November, narrowly beaten by Vauxhall, with Ford topping the list. In 2015, VW was almost overtaken by Audi and BMW, which narrowed the gap.

On 1 December, the car manufacturer announced that US sales fell by almost 25% in November. Less than 24,000 VW vehicles left the dealer in the US, with the biggest fall in Passat and Golf models. On 28 October, VW told shareholders that its third-quarter results were worse than expected. The car maker reported a €3.48bn (£2.5bn, $3.8bn) loss, down from a €3.23bn profit in the third quarter of 2014.

Despite the widely-reported emission scandal, revenue had climbed by 5.3% and the company said that Audi contributed largely to its results, but the high special items costs were too much to generate a profit. The firm also saw a slight downturn in the amount of cars sold.

Car sales

From November, overall car sales were up 3.8%, while Britons bought a total of 2,453,426 vehicles in the year to early December, an increase of 6.2%. The biggest growth was detected in alternatively-fuelled cars, of which 8.6% more cars were sold.

"November's figures come as a reminder of the strength of the UK car market, as low interest rates and competitive finance deals continue to attract consumers to new car ownership," said SMMT chief executive Mike Hawes. "We have been expecting a levelling off in demand for some time now – a development that is being realised following an unprecedented three-and-a-half years of non-stop growth."

Car sales were down slightly in October shortly after the Volkswagen scandal was uncovered by the US Environmental Protection Agency (EPA) in late September. Samuel Tombs, chief economist at Pantheon Macroeconomics, said the surge in November only meant that the underlying trend was slightly flat.

"November's sales might have been boosted by some consumers delaying their purchases from October when the VW emissions scandal hit the headlines," Tombs said. "Three consecutive monthly declines in consumer confidence do not bode well either. Car sales contributed 0.3 percentage points to last year's 2.7% year-over-year growth in overall household spending, so this slowdown will drag on the headline consumption numbers."

Car sales have been boosted in 2015 by low interest rates, but as the City keeps its eyes on the Bank of England's Monetary Policy Committee, it is expected to raise rates in early 2016.