Dark Days for VOLKSWAGEN

It seems that the issue which first broke news two weeks ago just won’t go away for the world’s largest producer of motor vehicles but why?

  • The CEO Martin Winterkorn has resigned after eight years at the helm of the group that holds some of the most famous car brands in the world and now faces potential criminal charges
  • A number of other high ranking executives have either been suspended or fired
  • The European Central Bank has stepped in and suspended their ability to borrow money
  • Switzerland have suspended sales of VW Group products
  • Thousands upon thousands of new vehicles have been taken off sale across the world
  • In May of this year the Group had a Market Capitalisation of $126b but today it sits at only $55b

 

Having announced that a global recall campaign will be launched early in 2016 to rectify the software issue haven’t they done everything they could reasonably be asked to do to “right the wrong”? Clearly not as the media continue to report, two weeks later, on a daily basis of how the scandal continues to unfold and when the media smell blood there is no let up.

Certainly the scandal itself is a pretty difficult thing to come back from but the purists amongst us might suggest that the subject of the correct and accurate CO2 emission figure for 99.9% of retail customers is irrelevant. The purchase of a car is very rarely based on its impact on the environment (as much as we might like to demonstrate an environmental awareness) but more so the impact on our pockets each month in relation to the fuel cost and the monthly finance payment. If we talk about the subject of fuel consumption we’ve all accepted for many years that no matter what car you buy you never seem to get those “official” MPG figures and after all what is “Extra Urban” so why all the fuss? So what’s the problem?

With a perverse sense of irony what the public are clearly saying is that they are …upset at being lied to and deceived and we now have a trust issue with you Mr Volkswagen. We’re not prepared to buy cars from someone we don’t trust and therefore we won’t be buying cars from you... The irony I refer to is the fact for so many years we, as the “Motor Trade” have been trying to overcome the untrustworthy car sales and service stigma and, I think, we’ve done a pretty good job at it by becoming more professional, more customer needs focused and more compliant in our actions.  As a result Volkswagen have risen to the higher echelons of the market place based on just those values and and operating with the utmost integrity and there lies the issue.......Integrity.

No PR Company in the world is going to be able to spin this and if you can’t take my word for it read the words of the new Group CEO, published in the last couple of days…

He said VW would have to become smaller and less centralized, through "evolution" rather than a "revolution" and predicted the company could "shine again" in two to three years.

"This crisis gives us an opportunity to overhaul Volkswagen's structures. We want to make the company slimmer, more decentralized and give the brands more responsibility."

…you see even the brand itself thinks the organisation will shrink as a result, certainly in the foreseeable future.

 

It’s hard to see a way back in the short term for VOLKSWAGEN Group and given, between the four main brands, they represented a tad under 20% of all the new vehicles registered in the UK up until the end of September how does that impact their dealer network? Sadly I think this will run for some time yet and I expect the Volkswagen Group retailer network will bear the brunt of the cost at a time when they expected those difficult market conditions to be behind them.

If you are concerned that your car has been affected by the scandal please use the following links to check

Volkswagen - http://www.volkswagen.co.uk/owners/dieselinfo

Audi - http://www.audi.co.uk/content/audi/owners-area/emissions.html

Skoda - http://www.skoda.co.uk/owners/dieselinfo

SEAT - http://www.seat.co.uk/owners/diesel-engines/home.html

               
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