By Peter M. De Lorenzo
Detroit. Last Friday was the end of VW – and the VW image - as we know it here in the U.S. You remember VW, don’t you? The once-quaint German import brand that endeared itself to the masses with its efficiency and value proposition at the onset of the turbulent and wildly influential 60s and then went on to hold sway with the American consumer public for decades since? The brand that left indelible marks both with the iconic vehicles (the Beetle and the Type 2 bus) it brought to market here and with the equally iconic and creative advertising campaigns that made history?
Even when the hippie microbuses and old school Beetles faded from the scene, VW managed to survive in the U.S. market against increasingly tough competition by at least delivering a modicum of value and Germanic driving fun in a select group of vehicles (Golf, GTI, Jetta) that still matter, despite stumblebum marketing efforts and a piss-poor – and well-deserved – quality/reliability reputation that just won’t go away.
Well, that VW – good and bad – is now officially dead. It died on the afternoon of September 18th, when the Environmental Protection Agency revealed that VW engineers had intentionally jury-rigged their diesel-powered vehicles to the calculated degree that they "contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test," according to Cynthia Giles, an enforcement officer at the EPA. Basically, what VW engineers did is create software that electronically masked the true emissions level of its diesel-powered vehicles during the EPA test in order to pass it, but the real emissions of the vehicles were in fact nearly 40 times the level of pollutants allowed under clean-air rules.
This car company, which made its reputation with its “Think Small” charm and which continues to court the American consumer public with its “march-to-a-different-drummer” tone and its calculated, green-tinged, holier-than-thou persona, was caught red-handed by the EPA and exposed for what they really are: Manipulative gamers of the system who apparently would stop at nothing to sell the idea of “green” vehicles, even if those vehicles weren’t actually legal to sell in this country as presented.
VW dealers are now barred from selling their remaining 2015 and the incoming 2016 diesel-powered vehicles in this country (diesel-powered VWs account for more than 20 percent of the company’s sales here in the U.S.) until the EPA gets some answers. And, oh by the way, the fines to VW could be as much as $18 billion – that’s with a giant “B”, folks.
The interesting part of this is that the EPA chose Friday afternoon to deliver its hammer blow, which is a time-honored corporate PR tactic for delivering bad news, with the idea that it gets buried in the rush to the weekend. But in this case the EPA did a reverse PR move, knowing full well that VW wouldn’t be able to muster a response in time to matter.
VW CEO Prof. Dr. Martin Winterkorn, of course, fell on his sword in a prepared statement released on Sunday (9/20), saying that the Board of Management takes the EPA’s findings very seriously and, “I personally am deeply sorry that we have broken the trust of our customers and the public. “ He goes on to say that “VW has ordered an external investigation of this matter,” blah-blah-blah and that, “the trust of our customers and the public is and continues to be our most important asset” blah-blah-blah.
Really? The trust of your customers and the public, eh, Martin? Here’s a clue, this is a disaster of monumental proportions. VW has been teetering on the edge in this market for a long, long time because the people who actually gave a damn about that hoary VW image left over from yesteryear have been dying off like clockwork, leaving the brand to thrash around in this market fighting off a burgeoning field of ruthless competitors that frankly not only do it better, but do it while delivering genuine value and proven reliability.
Of the customers VW had left – other than the enthusiasts buying the GTI and R models – its most vocal True Believers were the touchy-feely hordes encompassing a notable chunk of the “green intelligentsia.” These devotees bought into the spoon-fed VW argument, one that touted the European driving rationale when it came to discussing hybrids and electric vehicles, which for them meant that diesels made more sense in terms of real usability and practicality, delivering great mileage while meeting the regulations for diesels here in the U.S.
I hate to break it to you, Martin, but in one fell swoop the enduring appeal of the VW brand, which had already been fraying around the edges, has now been destroyed. VW coldly calculated that they could game the system and not get caught, that no one was really paying attention, or cared. (I attribute much of this to the classically arrogant German automotive mindset, one that has these executives collectively believing that they build the finest automobiles in the world – and by a long shot too – and that everyone else in the business is somehow inferior, or too stupid to know any better, or both.)
This will be the death knell for any VW customers left and not already turned-off by the brand’s dismal image when it comes to quality and reliability (one that has been hard-won over the last decade and a half, I might add). These customers will now drift away, just like the others who have already wandered off to Japanese, Korean and yes, even American brands. And even worse, it means the death knell for the rest of VW’s customers, the people who actually bought into VW’s carefully honed, green-tinged alternative appeal.
And there’s no amount of cute commercials that will be able to repair the damage done, or resurrect VW's touchy-feely, semi-green image from the scrapheap.
The history of this business is marked by brilliant minds that had breakthrough ideas and who turned them into mechanical conduits of our hopes and dreams. It has also been an endeavor littered with scoundrels, out-and-out crooks and con artists who thought they could put one over on the American consumer public and get away with it.
Where does VW land in this discussion?
Let’s just say that September 18, 2015, will go down in history as the day that the VW music died in the U.S. market once and for all.
And that’s the High-Octane Truth for this week.