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VW Commercial Unit Still Struggling

VW Group’s light commercial vehicles (LCV) state that the automotive market’s recovery is not as close as some might think. The company warns that the market has not yet overcome last year's difficulties.

"We know that 2010 will be another challenging year. The bottom has been reached in but not yet traversed," Volkswagen Commercial Vehicles Chief Executive Stephan Schaller was quoted as saying by Reuters.

In 2009 Volkswagen LCV sales dropped 20.7 percent to 354,770 vehicles, mainly due to the falling sales of the T5 Transporter van and large Crafter van. The more compact Caddy, the smallest model in the manufacturer’s range, registered a decrease of only 7.7 percent (151,488 vehicles).

Stephan Schaller said that for 2010 an improvement in the sales area is expected, as the T5 Transporter receives a major facelift and the company launces its first pickup truck, the Amarok, hoping to conquer a new segment of the market.

According to Reuters, management changes are also expected for this year, as the unit might form a commercial vehicle alliance, together with Swedish heavy truck brand Scania and MAN, in which VW owns 30 percent.

"LCV's are arguably Europe's most profitable vehicles - they account for only 12 percent of the industry's unit sales but we believe they make margins of circa 10 percent," Bernstein analyst Max Warburton wrote to clients in October.

"We expect a 2010 recovery thanks to recovering industrial activity and small business confidence plus potential LCV scrapping programmes," Bernstein wrote in one of its studies.

Other light commercial vehicles brands also register a decrease in their sales in 2009, one example being Renault.


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