Toyota Motor Corporation (NYSE:TM) has remained number one in global auto sales for four consecutive months. They are the leading automaker in the world so far this year. They’ve sold a total of 8.3 million units for the first 10 months of 2015.
Meanwhile, Volkswagen AG (OTCMKTS:VLKKAY), who was involved in the diesel engine scandal that began last September, is trailing behind the Japanese car manufacturer. Volkswagen only sold a total of 8.26 million units during the same time period.
According to recent reports, Volkswagen sales in October are down 5.3% over the years. October was the month after the company admitted that they have been deceiving US authorities on their diesel engine emission tests. They have been selling these vehicles since 2009 in the US.
In terms of group sales, Toyota is currently down 1.2% compared to last year but this figure only shows until their sales from January to October. Volkswagen, on the other hand, is down for about 1.7% in the same period compared to 2014.
Comparison of Net Profits
During the first half of the fiscal year 2015, Toyota has been the top player among the global car manufacturers. The Japanese-led company earned a net profit of $10.1 billion over the span of 6 months ending in September. Volkswagen, on the other hand, has net profits of $6.18 billion during the first 6 months of the year, ending in June. These figures say a lot to the direction of their sales towards the end of the fiscal year. It is more likely for Toyota to be maintaining their lead.
Even before the diesel engine controversy, Volkswagen had already trailed behind Toyota in terms of profits. This was due to the slower growth of the auto market in China, where the German car manufacturer actually holds their biggest market share. In addition, Volkswagen sales also slowed down in the growing US auto market. All of that affected the top line and bottom line sales growth of the company.
Volkswagen Faces Lawsuit
Currently, the German automaker is facing lawsuits filed by several authorities worldwide with very expensive settlement costs. They spent about $7.4 billion to cover the expenses of the controversy they are in; however, it seems that amount is insufficient.
Volkswagen conducted a recall of 11 million vehicles worldwide, adding to their corporate financial expenses. For the latest quarter (which is July to September), it has been reported that they’ve incurred a net loss of $1.84 billion because of the special charges taken in order to prevent potential high costs of lawsuits and massive recalls.
Who Benefited the High Growth of US Auto Market?
Among those who benefited the sales growth of US auto market is Ford Motor Company (NYSE:F). They’ve recorded a total net profit of $2.8 billion during the first half of the current fiscal year ending in June. General Motors Company (NYSE:GM), on the other hand, gained net profits of about $2.05 billion for the first 6 months of their current fiscal year.