VW, Skoda, Seat supply woes drag down compact car sales

Compact cars slipped to become Europe’s fourth-largest segment behind compact SUVs in the first nine months of the year after global supply shortages forced the Volkswagen Group to cut production of key models.

Segment sales stood at 980,864 through September, down 16 percent, according to figures from market researcher Dataforce.

The VW Golf retained its position as the segment’s best-seller but lost its traditional place as Europe’s most popular model to both the Peugeot 208 and Dacia Sandero small cars after sales dipped 25 percent to 132,989.

The Golf lost 44,974 sales compared with the year before, while the Leon, from sibling brand Seat, lost 38,395 registrations, the second-worst hit in the segment. The third-most-affected car in the segment was another VW Group model, the Skoda Octavia, which lost 29,097 sales compared with the same period in 2021.

VW Group’s order bank in Europe is now running at six months, equivalent to 1.9 million cars, Chief Financial Officer Arno Antlitz said during the company’s third-quarter earnings call last week.
 
The constraints have hit the company’s vehicles in volume segments the hardest as the company prioritizes higher-margin model lines.

“Not all the channels are fully open,” Antlitz said. “It's pretty clear that in a time where we don't have enough semis [semiconductors] or enough capacity we would concentrate on the more profitable channels." VW Group’s troubles maintaining its supply of mainstream compacts has elevated its rivals, with the Toyota Corolla moving ahead of the Octavia into second place in the sector after nine months despite an 11 percent sales decline for the Japanese model (see chart, below).

The new-generation Peugeot 308 increased sales by 52 percent to finish fourth, while the Hyundai Group’s more consistent ability to meet demand amid parts shortages saw four of its models finish in the segment top 10, three from Kia and one from Hyundai.

The VW Group’s supply problems also affected the ID3 electric hatchback, which suffered a 45 percent sales decline, pushing it out of the top 10.
 
All three best-selling EVs in the segment lost sales, with new overall leader, the full-electric Kia Niro, falling 10 percent and the Nissan Leaf down 14 percent (see table, below).

Despite that, EV sales within the segment grew to take a 15 percent share, overtaking hybrids to become the leading electrified drivetrain.

Electric newcomers such as the Cupra Born, Citroen e-C4 and Renault Megane E-Tech helped increase EV sales in the segment 11 percent to 144.216.

Also boosting numbers was the addition of the Chinese-built MG5 electric compact wagon, which recorded 9,568 sales, while September saw the first sales of the competitively priced MG4, a rival to the ID3.

Plug-in hybrids, however, suffered badly, falling 31 percent to 69,888 sales, mainly due to parts shortages within the VW Group.

The Volkswagen brand announced it had stopped taking orders for plug-in hybrids in March due to shortages stemming from Russia’s war in Ukraine, which halved sales of the Golf GTE.

“This was a supply issue, not a demand issue. Some specific parts were missing, therefore we were unable to deliver more plug-in hybrids to our customers,” a spokesman for the Volkswagen brand told Automotive News Europe.

Within the wider VW Group, sales of the plug-in hybrid Skoda Octavia were also affected, dropping 53 percent while production of the plug-in hybrid Seat Leon was halted, resulting in a 97 percent reduction in sales to just 429.

VW’s problems meant that plug-in hybrids accounted for just 7 percent of compact sales after nine months.

Meanwhile, Peugeot still registered 9,933 plug-hybrid versions of the new 308, while the first sales of the new plug-in hybrid Opel/Vauxhall Astra also boosted the count. The Kia XCeed plug-in hybrid topped the table, with 10,823 registrations.

Hybrids accounted for a 13 percent share of the segment, driven by sales of the Toyota Corolla. Hybrids accounted for 90 percent of Corolla sales.

Sales of diesels, meanwhile, tumbled 26 percent as more brands dropped versions powered by the fuel. Those models losing diesel options in the last 12 months included the Skoda Scala, Citroen C4, Honda Civic, Kia XCeed and Ceed, Hyundai i30 and Mazda 3. The Skoda Octavia was Europe’s best-selling diesel at 47,064 sales, beating the Golf.

The station wagon remains a popular compact body style with the Skoda Octavia wagon leading both the segment and European sales overall, despite registrations falling 23 percent. The wagon version accounts for more than three-quarters of Octavia sales, according to Dataforce figures (see chart, below).

The Touring Sport wagon version of the Corolla is also a big seller, accounting for just under half all Corolla sales in the first nine months. Toyota made the decision to expand production of the Touring Sport at its Corolla plant in Derbyshire, central England, with fleet customers its main purchase target.

“It’s quite a weapon against the competition,” Andrea Carlucci, director of marketing and product development at Toyota Motor Europe, told Automotive News Europe earlier this year.

Meanwhile, the Kia Ceed SW was the No. 3-selling wagon in the segment, with a volume of 30,841, accounting for nearly 60 percent of all sales of the model line.

Ford Focus sales were also boosted by the wagon version, which represents almost half the model’s sales.

There were signs in September’s figures that the segment might stabilize as supply returns. Skoda overcame recent parts shortages to register 17,730 Octavias in the month, almost triple the same month last year and enough to overtake the Golf for the No. 1 spot.

With new models such as the Peugeot 308, Opel/Vauxhall Astra, Renault Megane E-Tech and Honda’s hybrid-only Civic joining the mix, the sector could see a rejuvenation in 2023.