Product News and Recalls

Volkswagen Under Siege as Fines Grow, Customer Confidence Plummets

troubles continue for volkswagenThe repercussions have only begun for Volkswagen. The largest vehicle manufacturer in Europe continues to struggle after revelations that its diesel-powered cars employed devices and software to defeat environmental tests. At their worst, Volkswagen vehicles can pollute at levels nearly 40 times the amount allowed by current environmental regulations.

The impact on the company has been felt on a global scale. Deliveries of Volkswagen vehicles fell 5.3 percent last month as less than half a million cars were delivered to dealers around the world. While Germans themselves may continue to support the homegrown company (delivery numbers in Germany are actually rising), global markets including the rest of Europe, the UK, and other overseas markets are ensuring that these gains vanish instantly.

The company diverted 6.7 billion euros to handle the ramifications of recalling some 11 million vehicles but quickly admitted that this was not nearly enough money. Internationally, governments are already lining up to sue Volkswagen for deceiving environmental regulators and polluting their countries. Brazil recently announced a $13 million fine for the company and more are sure to follow.

The biggest impact to the brand, however, will no doubt come to it via the wrath of its customers. Volkswagen owners can, in many circumstances, be viewed as fans. They are willing to pay extra for the technologies included in the cars; technologies that, until recently, included engines billed as fuel efficient and environmentally friendly. They like their cars, they talk to their friends about their cars, and they are highly brand-loyal.

It is borderline comical then that, in a move toward “regaining [their] customers’ trust,” the head of Volkswagen’s US operations announced that VW owners would be getting $500 payouts from the company. Owners of diesel-powered vehicles would be getting an additional $500 in the form of a gift card that can only be used at VW and Audi dealerships.

It is worth noting that the diesel option for these cars added approximately $5,000 to the price tag of each vehicle.

This is just the start for Volkswagen as angry owners, as well as governments, punish the company for a deception that wreaked havoc not only financially, but also environmentally.

In a world teetering, as some believe, on the brink of environmental catastrophe, one has to wonder which offense was worse.