European sales will suffer when scrapage schemes end
31 July 2009

Volkswagen has warned that 2010 will be a flat year for car sales with “zero growth” in the market.

VW reported an 83 per cent year-on-year drop in profits for the second quarter of 2009, down to 282 million euros (£241m). But the firm was one few manufacturers to record a profit in this period.

Detlef Wittig, the firm’s head of marketing and sales, said he expected VW’s sales to be at “more or less the same level” in 2010. However, he also stated, “VW will be able to maintain its market position."

VW’s sales so far in 2009 have been boosted by the success of pan-European scrappage schemes. Wittig said half of the 800,000 orders in the German market this year were thanks to the scrappage incentive. VW has also claimed a quarter of all scrappage sales so far in Germany.

Wittig said markets such as China and India would offset a plunge in demand in European states next year, when scrappage schemes end. He forecasts a market decline of one million cars, to 2.6m-2.8m cars sold in Europe in 2010.

VW’s market share grew from 9.9 per cent to 12 per cent in the first half of 2009.

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