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Volkswagen reports surprise jump in U.S. sales

Volkswagen of America on Thursday reported a slight increase in sales last month over the year-earlier period -- defying industry expectations that sales of VW auto brands would drop following a corporate scandal involving the company's diesel vehicles.

The German automaker's U.S. unit reported sales of 26,141 vehicles in September, a 0.56 percent rise from the same month in 2014, the company said.

"For what they had going against them, this isn't a bad result at all," Jessica Caldwell, director of industry analysis at Edmunds.com, told CBS MoneyWatch. "But the Jeep brand was up 40 percent, so basically everyone had high year-over-year comparisons."

Analysts had projected that Volkswagen would be the sole major car company to experience a decline in U.S. sales in September, due to the fallout from the company's admission that it rigged as many as 11 million diesel cars to cheat emissions tests in the United States and overseas.

About 500,000 of the effected cars were sold in the U.S., and sales of a wide range of 2-liter diesel engine vehicles were halted at VW dealerships across the country after the Environmental Protection Agency on Sept. 18 ordered the company to stop selling the pollution-spewing diesels and fix those already on the road.

"For the first 20 days of the month, VW was having a great September," said Larry Dominque, executive vice president of industry solutions at TrueCar.com, which had projected sales of VW brands would decline 5.2 percent in September.

The outlook for Volkwagen's U.S. sales is bleak, given diesels represented nearly a quarter of U.S. sales for Volkswagen. "So long as the stop-sale exists, we would expect them to be down 20 or 25 percent, because they can't sell what they've got," Dominque said.

News of the scandal led to the resignation last month of Martin Winterkorn, the Germany-based chief executive of parent Volkswagen AG, and left the company facing a slew of government investigations, consumer lawsuits and the task of devising a fix to correct the millions of diesel cars outfitted with illegal emission-control software.

On Tuesday, Volkswagen said customers would be informed "over the next few weeks and months" about planned steps to make sure the cars comply with air pollution regulations.

The vague timing might not help the company's cause with customers, and also puts dealerships trying to sell other VW brands in a difficult spot.

"The quicker they announce what they are going to do, the quicker they can recover," said Caldwell. Volkswagen was already struggling in the United States, where its automobile market share is only about 2 percent, before the emissions debacle came to light, Caldwell noted. "Consumers have questions, dealers have a lot of questions," he said.

One positive for the beleaguered company is that it had a loyal following among its albeit small customer base in the U.S., with Volkswagen brand enjoying almost twice the customer loyalty compared to Mazda, Dominque said. "When people are highly loyal to a brand, they'll defend through a lot of bad news."

Mark McNabb, chief operating officer of Volkswagen of America, was possibly mindful of that notion in comments that came with the release of its monthly sales figures.

"We would like to thank dealers and customers for the support of the Volkswagen brand," McNabb stated. "Volkswagen will continue to work diligently to regain trust and confidence in our brand.

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