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VW hit by falling sales as crisis deepens

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The ever-expanding emissions crisis at VW is having a direct effect on sales.

I am told that the first evidence that customers are turning away from VW will be revealed in the new car registration figures to be published by the Society of Motor Manufacturers & Traders (SMMT)on Thursday morning.

VW sales in the UK are down by more than 8% over the same period last year, I understand.

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Two other VW brands – Seat and Skoda – are also suffering sales declines.

But I understand that Audi sales are holding up.

Of course, these are only one month’s figures and come after years of rising – and record – numbers.

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And other manufacturers have apparently also seen steep declines, even if they are not implicated in the emissions scandal.

But my industry sources are saying that VW is linking the sales decline to the events of the past six weeks.

Compensation payments

With its share price now a third lower than at the beginning of the crisis, it is clear that VW is paying a heavy commercial price for the widening emissions scandal.

The BBC has been told that Patrick McLoughlin, the transport secretary, has spoken to Herbert Diess, a senior VW official in Germany, today and demanded compensation for any lower resale value of cars caught up in the crisis.

Whitehall sources tell me that VW has agreed that payments might have to be made.

Louise Ellman, chair of the Transport Select Committee, has also told the BBC that the committee is likely to widen its inquiry into VW and the testing of all motor cars.

She has written to the German carmaker demanding more details on how “defeat devices” came to be used.

“The committee will look at the responses we get, but I anticipate the committee will want to do more work on this very important issue,” she told the BBC.

“It’s about the scandal of Volkswagen, but it’s also about the broader policy of testing, where there are major questions about the testing of all vehicles.”

The credit rating agency, Moody’s, has also downgraded the German carmaker, which could mean that VW has to pay more to borrow money.

“Today’s downgrade reflects mounting risks to Volkswagen’s reputation and future earnings following its announcement on 3 November regarding irregularities in CO2 and fuel consumption levels for certain Volkswagen group vehicles,” said Yasmina Serghini-Douvin, a Moody’s senior credit officer and lead analyst on Volkswagen.

She said Moody’s was also taking into account “fresh allegations [which VW denies] from the US on 2 November that defeat devices were also installed in certain Audi, Porsche and Volkswagen models in the US”.

With sales down and the value of the company share price cut by a third, VW’s “relentless” pursuit of the truth is proving to be a costly and damaging process.

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