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Volkswagen sales Tony Ding/AP

Dr. Herbert Diess, chairman of the Volkswagen brand, poses with the I.D. Buzz all-electric concept van, at the North American International Auto Show, Monday, Jan. 9, 2017, in Detroit.

January 10, 2017

Volkswagen sales continue strong growth despite emissions scandal

Manufacturer is world's second largest carmaker behind Toyota

FRANKFURT, Germany — Booming business in China helped push Volkswagen to a 3.8 percent sales increase in 2016 — despite lawsuits and criminal investigations over its cars that cheated on emissions tests.

Volkswagen sold 10.31 million cars across all of the company's brands, which include Audi, Porsche and Skoda. Sales in China grew 12.2 percent for the full year, to 3.98 million.

The results strengthened Volkswagen's bid for the title of world's largest carmaker against the sales leader from 2015, Toyota. The Japanese automaker led with 10.15 million, followed by Volkswagen with 9.93 million and U.S.-based General Motors with 9.8 million.

Volkswagen was helped by a strong December. Global sales jumped 11.8 percent during the month, with stellar growth of 18.6 percent in China, the company's biggest single market.

Volkswagen has agreed to a $15 billion settlement with U.S. authorities and car buyers, but is still solving its legal issues. It has a criminal penalty pending and an executive formerly responsible for U.S. environmental compliance was arrested in Florida over the weekend.

Sales fell by 2.6 percent for the year in the U.S., where the scandal first broke in September 2015. The U.S. Environmental Protection agency said Volkswagen had illegally installed software that turned on pollution controls when cars with diesel engines were on test stands. During normal driving, the emission controls were turned down, improving performance but violating limits on health-damaging nitrous oxides. Some 11 million cars worldwide were sold with the illegal software.

Yet even the U.S. market showed signs of a rebound, with a robust increase of 16 percent in the last month of the year. The U.S. is a much smaller market for the company than China, a factor which helped limit the global sales damage.

Volkswagen still faces serious trouble from the scandal. It has yet to agree on a criminal penalty with the U.S. Justice Department that could run to several billions of dollars. In addition to the executive arrested in Florida, Oliver Schmidt, engineer James Liang has pleaded guilty to conspiring to defraud regulators and customers.

German prosecutors are investigating as well. Investors have filed suit in Germany seeking 8.2 billion euros ($8.62 billion) in damages.