(FROM THE WALL STREET JOURNAL 2/13/16) 
   By William Boston and Monica Houston-Waesch 

Volkswagen AG's global car sales returned to growth in January on the back of resurgent demand in China that offset declines in its namesake brand in other markets.

January's sales report shows that Volkswagen's market-leading position in China and continued gains by its premium brands Porsche and Audi are helping it cope with the erosion of its namesake brand in hard-hit emerging markets and the impact of its emissions-cheating scandal on sales in the U.S. and Europe.

Its sales grew strongest in China, rising 14%, while sales in Russia and Brazil, struggling with declining economies and volatile currencies, fell 30% and 39%, respectively. Volkswagen's sales in the U.S. declined 7% and were up about 3% in Western Europe.

Economic weakness in Russia and Brazil are hurting other auto makers, including France's Renault SA, which on Friday warned it would need a bailout for its Russian operation or the unit could face bankruptcy. It confronts a deepening crisis at OAO AvtoVAZ, the Russian car maker it controls with Japanese partner Nissan Motor Co.

Renault said it is discussing a cash injection with other shareholders in AvtoVAZ that could include a debt-for-equity swap. AvtoVAZ reported a net loss for 2015 of 73.8 billion rubles ($928 million) as sales of its Lada sedans fell 31%. The Russian car maker said without aid it could face doubt about its ability to continue as a going concern.

Volkswagen CEO Matthias Muller said in a statement, "The situation in Brazil and Russia remains tense, China is regaining momentum and the trend in Europe is generally stable." The company's overall sales last month rose 3.7% to 847,800 cars, trucks and motorcycles.

Hardest-hit by the emissions crisis is Volkswagen's namesake brand -- Volkswagen Passenger Cars -- by far its biggest business by sales. Brand sales rose 2.8% to 521,400 vehicles in January, but all of the growth came from Asia, especially China. Volkswagen brand sales declined in every other market.

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Inti Landauro and James Marson contributed to this article.

 

(END) Dow Jones Newswires

February 13, 2016 02:47 ET (07:47 GMT)

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