Article

Far From Over

Volkswagen will find a way to recover from its historic deception, but dealers will still be forced to cope with the fallout.

December 2015, Auto Dealer Today - Feature

by Tariq Kamal

The dominos have already begun to fall in the Volkswagen emissions scandal. In the days following the Sept. 18 announcement that the EPA had found the German manufacturer to be in violation of the Clean Air Act, CEO Martin Winterkorn resigned, three research and development executives were suspended and the value of VW’s stock fell by a third.

At issue are emissions produced by VW’s line of turbocharged direct injection (TDI) diesel engines, which can be found in four Audi/VW models sold in the U.S. Shockingly, astoundingly, disturbingly, the EPA said the factory programmed the engines to detect the presence of emissions-testing equipment and switch to a low-emissions mode for the duration of the test — and VW admitted they had.

Why? Well, it appears all the emissions safeguards built into those engines, including an array of computerized fuel injectors designed to burn fuel as cleanly as possible, did little to improve fuel economy. You can’t sell a small car that doesn’t get good mileage, and you can’t sell any car that gets good mileage but doesn’t meet emissions standards.

But VW did, and they are going to pay a huge price. Estimates are in the billions, and that’s just for penalties handed down by the U.S. government. Those cars were sold worldwide. And each sale represents at least one driver whose TDI is suddenly worth much less than it was several weeks ago. Of course, it will be recalled and repaired, but there is a very real possibility that, whatever fix the factory implements, the fuel economy will be negatively affected.

That’s not all. Dealers are going to feel this pain. It will hurt in the long term just as surely as it hurts in the here and now. VW dealers didn’t make the cold, calculated decision to cheat on emissions tests. VW dealers didn’t build those engines or design that software. And they never would have, because to you, car buyers are not “end users.” They are living, breathing human beings, many of them close friends and family members. You spend hours, weeks and years cultivating long-term relationships and, yes, brand loyalty.

In the pages of this magazine and at the conferences we stage, much of the content that pertains to training and compliance can be crystallized in a single word: trust. With every digital marketing campaign, in every commercial, with every walkaround and F&I product pitch, we say you have to earn the customer’s trust. Today’s car buyers arm themselves with research and options. They demand transparency.

When the recalls have been completed and the headlines fade away, all that will be left is a marque stained by deceit and a lingering resentment among VW buyers. It could take generations to fully heal.

VW’s marketers are no doubt working on a bold new advertising campaign for which they will find a classy way to admit their wrongdoing and promise there will be no more missteps. It will be a stirring experience, that first ad, with swelling orchestral music, slick graphics and talking heads that look you right in the eye and make you believe that all they want is to do the right thing. It will force an emotional response from every viewer.

But if you’re a VW dealer, it won’t do you much good. You’ll have to close your browser window or turn off the TV and get back to the business of finding new customers and keeping the old ones. Their attention, and their trust, will be hard-earned.

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