March 1, 2016 / 5:38 PM / 2 years ago

Volkswagen says UK car sales to fall in first quarter, signs of recovery ahead

GENEVA (Reuters) - Sales of Volkswagen-branded (VOWG_p.DE) cars in Britain will fall in the first quarter, hit by the diesel emissions scandal, but strong orders mean there are signs the carmaker is bouncing back, its UK managing director said on Tuesday.

A still image from a video footage shows Volkswagen's UK managing director Paul Willis appearing before British lawmakers in the Transport Comittee, in London, October 12, 2015. REUTERS/Parbul TV via Reuters TV

The VW brand has been hit hard in Europe’s second-biggest car market with sales falling 14 percent in January from a year earlier, following on from declines every month since October.

However, Paul Willis told Reuters that whilst registrations were down, orders for new vehicles - which can sometimes take months to feed through into official sales data - were strong.

“In the first quarter, our registrations will be slightly down,” Willis said in an interview during the Geneva car show.

“January registrations are down but orders actually were up at record levels. We’ve had a strong February.”

Sales were hit after the German carmaker admitted in September that it had rigged U.S. diesel emissions tests and up to around 11 million vehicles worldwide could have illegal software installed.

The scandal, which led to the resignation of several top managers and sent the company’s share price tumbling, is likely to cost Volkswagen tens of billions of dollars.

Sales, though, have recovered in many markets with worldwide deliveries of VW-branded cars up 2.8 percent in January from a year earlier at 521,400, driven by a 15.4 percent jump in China - in contrast to Britain where sales continue to fall.

Willis acknowledged that there was still more to do to win back customers’ trust.

“We’ve still got a lot of work to do to make sure that we do fix the problem with our customers, but the Volkswagen brand is a very strong brand,” he said.

Editing by Susan Fenton

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