VW dealers offer hefty discounts as diesel crisis keeps U.S. buyers away

Wed Oct 28, 2015 5:05pm EDT
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By Paul Lienert and Alexandria Sage

DETROIT/SAN FRANCISCO (Reuters) - Many of Volkswagen AG's (VOWG_p.DE: Quote) U.S. dealers are offering hefty discounts of $6,000 and more on new 2015 and 2016 gasoline models as the German automaker began more aggressive efforts to rebuild sales in the wake of the diesel emissions cheating scandal, a Reuters analysis of dealer prices shows.

Retail price discounts range up to $7,850 on the 2015 Passat, according to an online survey of VW dealers on Wednesday. Discounts of up to $7,290 are being offered on the 2015 Jetta and up to $5,625 on the 2016 Jetta. Battery electric models such as the e-Golf have discounts of up to $11,000, while gasoline-electric models such as the Jetta Hybrid have prices slashed by up to $6,000.

Meanwhile, a potential deal between VW and U.S. and California regulators to fix nearly 500,000 diesel cars with illegal software could still be weeks away, according to two sources familiar with the discussions.

The German automaker continues to work to get its 2016 diesel models approved for sale by the U.S. Environmental Protection Agency and the California Air Resources Board, one of the sources said.

VW on Tuesday said it was "continuing to work with the agencies to provide a remedy" to resolve its diesel issues, but that it had "no announcements on timing." CARB has given VW a Nov. 20 deadline to present solutions. EPA has not specified a deadline, but is working closely with CARB.

Owners of diesel VW models are "sitting back and waiting to see how much they'll be compensated" in the form of discounts and other incentives, said Dennis Gaudet, a New Hampshire dealer who attended VW's annual U.S. dealer meeting last week in Orlando.

VW has given U.S. dealers some money “to be able to take care of the customers who might be having the most difficult time,” said Gaudet.

After the scandal broke in mid-September, VW ordered its U.S. dealers to stop sales of 2015 models with four-cylinder diesel engines. The 2016 diesels have not been certified for sale by the EPA.   Continued...

The logo of German carmaker Volkswagen is seen at a VW dealership in the Queens borough of New York, September 21, 2015.