Scandal fails to dent VW’s appeal
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Volkswagens still popular
Bargain-hunting British car buyers hoping the VW diesel scandal would lead to cheaper second-hand cars have been disappointed, as two of its most popular models have maintained their appeal, say experts.
Volkswagen was outed for cheating emissions tests in the United States a year ago.
But despite the case still rumbling on and the carmaker embroiled in recalls of all diesel cars equipped with defeat devices worldwide, resale values haven't seen a big shift downwards, says What Car? magazine.
Those hoping for a cheap car on the back of negative sentiment would have been rubbing their hands together 12 months ago, expecting VW values to fall through the floor on the back of biggest scandal in recent automotive history.
However, WhatCar? has found this hasn't been the case, with its depreciation database suggesting Volkswagen, Audi and Skoda vehicles still retain slightly above average value after three years and/or 58,000km.
British prices have dipped but only by less than 1 per cent more than the overall market. VWs retain 42.2 per cent of their original value after three years, says What Car?, compared to the overall market's 41.7 per cent.
Demand remains high on the new market, too. The Golf is the third most bought car in Britain this calendar year, while the Polo is the seventh best-selling model of 2016.
Much of this is down to customer loyalty, the car magazine said.
In a WhatCar? survey of 4000 drivers, 59 per cent said they were just as likely to buy a Volkswagen Group car as they were before the scandal first broke on September 16 2015.
The editor of the monthly automotive magazine, Steve Huntingford, said: “I'm sure there are motorists out there who were rubbing their hands in glee at the thought of used VW prices falling off a cliff because of the emissions debacle.
“That simply hasn't come to pass, however, and while the VW story continues to rumble on a year after the story first came to light, the Golf and Polo are still among the most popular new cars in the UK and are holding above average value.
“What this reflects is the fact that, although VW has cheated and undoubtedly still has a job to do to retain the trust of its customers going forwards, it still makes cars that consumers want to buy.”
WhatCar? said VW models overall retain 42.2 per cent of their original value now, down a meagre 2.7 per cent compared with just before the scandal broke.
Audi models have depreciated a similar amount in the same timescale, dropping from retaining 47.6 per cent of their original value in July 2015 to 44.7 per cent in June this year.
Seats and Skodas have also depreciated post-scandal, but only by negligible amounts, with drops of 0.5 per cent and 0.4 per cent respectively. However, across the automotive industry as a whole, there has been a dip in residual values of slightly more than 2 per cent for all manufacturers, meaning the VW Group brands are reflecting the market standard.
Overall, across all car makers, the average residual value for a 3-year-old car and/or 36,000 miles is 41.7 per cent ,WhatCar? confirmed.
That's not to say Volkswagen hasn't been poleaxed by the scandal, though.
In July, the German brand announced a profits plunge of 57 per cent for its second quarter, with pre-tax profits dropped from €3.7 billion in 2015 to €1.6 billion for the months of April to June this year.
Frank Witter, the VW Group's chief financial officer, said the firm had delivered “solid results in difficult conditions” and that it faces “continued hard work to absorb the significant impact from the diesel issue”.
At the time of the second quarter results, chief executive Matthias Muller said the brand was “satisfied” with the results for the first half of 2016.
“The figures show that our operating business is sound,” he said.
That's despite the carmaker agreeing a record US$14.7 billion settlement with the US Government in June, which will see American owners paid up to $10,000 each in compensation.