European car market up 6.3pc in January as Volkswagen sales fall 4pc

European car sales rose 6.3pc to 1.1m vehicles last month, industry data showed, even as Europe’s largest carmaker, Volkswagen, saw registrations of VW-branded cars fall 4pc in the wake of a diesel emissions scandal.

VW’s rivals Ford and General Motors’s Opel posted rises in sales of 11.4pc and 12.4pc respectively, according to car registration data for European Union (EU) and European Free Trade Association (EFTA) countries. The Volkswagen Group as a whole saw sales rise 1pc in January, buoyed by a 14pc jump in registrations for its premium Audi division, according to the figures published by European auto industry association ACEA.

In the European Union registrations rose to 1,061,150 last month, a 6.2pc rise on a year ago and marking the 29th consecutive month of growth, ACEA said.

“When adjusted for working days, January registrations were up 11.6pc, year-on-year the second-strongest increase for any month in the past five years,” analysts at Barclays said, noting that January’s sales should not be taken as a projection for the full year.

Barclays said they expect sales to grow 3.3pc in Western Europe this year, slowing from last year’s 8.9pc, but remaining above the growth rates of other markets like the United States.

Registrations in Italy and Spain rose 17.4pc and 12.1pc, while the bigger markets of France, Germany and the UK posted modest single-digit gains. “We think the European market will remain buoyant given the continued improvement in employment and household incomes, especially in southern European economies,” Barclays said yesterday.

The drop-off in Volkswagen sales comes after it was revealed that managers at the giant German manufacturer were notified about the diesel probe in May 2014.

A high-ranking employee warned senior VW managers in May 2014 that US regulators might examine car engine software as part of an investigation into pollution levels, two sources familiar with the matter said.

The warning came in the form of a letter, which was sent more than a year before the German carmaker’s public admission that its cars had been equipped with software to manipulate emission test results, the sources said, raising questions about how much senior managers knew about the scandal.

The US Justice Department is suing the company for up to $46bn for alleged violations of environmental law while regulators and prosecutors are looking to establish what role, if any, had been played by senior managers, including former chief executive Martin Winterkorn.

Volkswagen admitted in September 2015 to cheating pollution tests but has maintained that only a small number of employees were to blame and that there was no indication that board members were involved.

German newspaper ‘Bild am Sonntag’ was first to report the existence of an internal letter warning senior managers about the investigation.

Citing documents from the German carmaker’s own investigation of the scandal, ‘Bild am Sonntag’ said that an employee had notified superiors about the probe.

“It can be assumed that the authorities will investigate VW systems to establish whether Volkswagen has implemented test-recognition software,” the newspaper said, citing a letter revealed by Jones Day. (Reuters)

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