Volkswagen

I’ve been intending to write a blog about VW and the diesel engine emission situation for a while but because it is such a large area and covered really well elsewhere I haven’t got round to it until now. But a news item just released has prompted me to write this – apparently VW are going to cut investment by €1bn per year as a result of the scandal, presumably to cover some of the cost of sorting out the cars they need to recall as well as possible fines and compensation.

The overall issue has a lot of consequences for VW from a marketing and brand perspective, mainly based around trust of customers. The reduction in investment will mean that VW and its brands will have less to offer customers than they had intended, assuming they were valid investments this means that the offer will not be as good – to me that means they will be reducing the value of the brand further in relation to competitors rather than rebuilding reputation through great products customers can trust.

Time will tell what impact this all has but VW do not seem to have followed the 2S principle of crisis management – be Swift and Sincere. They are taking too long, drip-feeding responses which are reactive more than proactive, the allegation of it being just two rogue software engineers seemingly too far-fetched to demonstrate sincerity (and that is just one example).

This is a story which will continue to run I suspect.