VW Group sales fall for first time in years

FRANKFURT (Reuters) -- Volkswagen Group sales fell for the first time in at least four and a half years in April, raising pressure on the automaker to fix trouble spots laid bare by the ouster of former chairman Ferdinand Piech.

Deliveries at the 12-brand group, including luxury division Audi and sports-car maker Porsche, slid 1.3 percent year-on-year to 853,200 cars, VW said on Friday, as slowing momentum in China and a drop in Latin American sales outweighed gains in Europe.

Monthly sales at Europe's largest automotive group have not shrunk at least since December 2010, according to company records checked by Reuters. The drop in April was published by VW after German stock markets had closed for the week. The slide reflects the 4.8 percent decline published earlier this week in core brand sales which account for 60 percent of group deliveries.

"While we felt tailwinds in Western Europe and North America and could increase group deliveries strongly in some places, South America and Eastern Europe remain challenging, especially due to the market development in Russia," VW sales chief Christian Klingler said in a statement.

VW Group CEO Martin Winterkorn has pledged to tackle problems such as weak profitability at the core VW brand and underperformance in the U.S. that have come into focus after being flagged by Piech, prompting a public showdown with the CEO and Piech's ouster.

While VW is struggling to revive business in the U.S. due to a lack of models in lucrative crossover segments, the carmaker is also grappling with slowing demand in China, a steady source of group profit in past years and destination for more than a third of its models.

"The risks from the [VW brand] sales numbers and China news pose material downside risks to earnings per share" at VW, Morgan Stanley said on Thursday in a note to analysts. "We think the upside for the group is being overestimated."

VW Group did not break out regional sales figures for the month of April but said that deliveries in Brazil were down 26.7 percent at 200,400 vehicles in the first four months, while sales were up 0.2 percent at 1.19 million in China. Last month, it had said January-to-March sales in Brazil were down 22.1 percent and in China were up 2 percent.

4-month gain

Through April, the group's global volume rose by 1 percent to 3.34 million vehicles with all brands except the core VW passenger car brand recording gains.

VW brand's deliveries fell 2.2 percent to 1.98 million vehicles. Audi's volume was up 5.2 percent to 591,100 and Porsche sales rose 32 percent to 72,600.

The Czech brand Skoda saw volume rise 6.1 percent to 357,200 while global sales at VW's Spanish brand, Seat, increased by 8.6 percent to 138,400.

The group's global sales figure includes deliveries of VW commercial vehicles, and MAN and Scania heavy trucks.

Automotive News Europe contributed to this report