Volkswagen diesel sales take another blow

Volkswagen has stopped sales in the 28-country European Union of the remaining new cars that contain the diesel engine fitted with the software that was used to cheat on U.S. emissions tests.

The company on Wednesday confirmed a report in the weekly Automobilwoche that it has halted sales of as yet unregistered cars with the EA 189 engine that are still with dealers or in storage. It said the measure affects a “very limited,” though unspecified, number of vehicles.

More recent models with engines in the “euro 6” emissions category aren’t affected by the scandal.

Switzerland, which isn’t a member of the EU but has close trading ties with the bloc, last month banned sales of new VW cars with the engine that is affected.

Meanwhile, the company is trying to woo U.S. consumers with new-vehicle discounts that by one measure are almost twice the industry average.

Current owners of VW-brand vehicles can get interest-free loans along with rebates of up to $2,000, as well as low-cost leases. During the first week of this month, the brand’s average discount to the sticker price was 11.1 percent, compared with the industry’s 6.2 percent, according to TrueCar, a website that tracks car pricing.

Volkswagen is trying to minimize the damage to its reputation and deliveries from the scandal, which probably will result in large fines and has already forced chief executive officer Martin Winterkorn to step down. The German company is also trying to get U.S. buyers to consider its gasoline-powered vehicles after it had to stop selling some diesel models. Diesels were more than 20 percent of its U.S. sales.

“They need something to get traffic to their showrooms because the diesel lovers are not coming in,” said Joe Phillippi, principal of the Auto Trends Inc. consulting firm. “They weren’t exactly knocking the cover off the ball before the crisis either.”

VW is offering three-year leases on the brand’s top seller, the Jetta compact, for $139 a month with a $2,199 down payment, according to the company’s U.S. website. That’s cheaper than Honda and Toyota are showing on their Web pages for their competing compacts, the Civic and Corolla. Volkswagen also is offering interest-free financing and as much as $2,000 in discounts on its No. 2 seller, the Passat sedan.

Volkswagen spokeswoman Jeannine Ginivan said the deals are aggressive and are an effort to bring in customers and help dealers boost sales.

This story was originally published October 21, 2015 at 3:36 PM with the headline "Volkswagen diesel sales take another blow."