VW Wants To Rebuild Trust; Details Are Lacking

Asserting that it will “redefine” its brand identity in the U.S., Volkswagen’s global brand chief Herbert Diess assuaged the concerns of dealers Saturday who were threatening legal action in the wake of its emissions scandal. Still, some remain vocally concerned that not enough is being done.

Saturday’s meeting during the National Auto Dealers Association convention in Las Vegas “marked a cease-fire in VW’s strained relationship with its U.S. dealers,” reports Ryan Beene for Automotive News. “Dealers say they came away convinced VW would continue to pursue the objectives championed by former VW of America CEO Michael Horn, even without any clear signs of how VW planned to rebuild its reputation with customers and regulators in the wake of the emissions crisis.”



Indeed, much remains unresolved for the automaker. “A federal judge in San Francisco set a deadline of April 21 for the company to come up with a plan to get the over-polluting cars off the road. Volkswagen still has not said how it will compensate customers who bought the cars, or what it will do for dealers who have lost business as a result of the scandal,” reports UPI’s Eric DuVall.

In remarks to reporters after the meeting, “Diess said the company is preparing to lower prices and retool its fleet of offerings, after dealers encouraged them to do so,” DuVall writes. “One dealer present in the meeting described the new appeal as ‘price-competitive German engineering.’”

The Wall Street Journal’s John D. Stoll interprets the crux of Diess’ message as “Volkswagen aims to be a mass-market player in the U.S. market, willing to chase volume at the expense of exclusivity.”

He also reports that it’s “unclear if Mr. Diess’s actions would persuade a smaller group of dealers to drop threats to sue the company. Leonard Bellavia, an attorney who says he represents smaller dealers unhappy with Volkswagen managers, said several of them were ready to file a lawsuit.”

Indeed, “Steve Kalafer, owner of a 17-franchise New Jersey dealership group, said the promises were ‘broad statements’ and ‘nothing more than more of the same,’” reports Steph Willems on The Truth About Cars.

One reason for Volkswagen’s lack of specifics, however, is that U.S. District Judge Charles Breyer, who is overseeing the court case, had asked the company not to disclose details of talks with regulators before it supplies the specific remedies it proposes in his courtroom later this month.  

Meanwhile, most dealers appear to feel that they — and their customers — will be better served by taking a collaborative approach with the automaker.

“On Friday, many of Volkswagen’s 652 U.S. dealers met and selected a five-member committee to negotiate with the automaker,” writes John Lippert for Bloomberg. Jason Kuhn, owner and chairman of Kuhn Automotive Group in Tampa, Fla., was chosen to lead it.

“The dealer body is unified that it’s not in our best interest to take a litigation posture,” Kuhn said. “These are going to be our partners not only now but for a long time to come.”

“Jason believes — and I agree — that in order to properly compensate consumers who own the affected vehicles, it is important to keep the Volkswagen brand as a going concern in the United States,” emails Thomas J. Young, a Tampa-based attorney who formerly was a proponent of litigation but now believes an amicable solution is the best solution for all involved.

“If VW franchisees go to battle with the manufacturer in a class action, it will only hurt Volkswagen's ability to compensate car owners, particularly if the manufacturer pulls out of the U.S. market or puts its U.S. entity into bankruptcy,” Young writes.

According to Diess, “compensation was not discussed at Saturday’s meeting, and he indicates he is hopeful any lawsuits can be avoided,” reportsWards Auto’s David E. Zoia. “I think we had a very positive atmosphere,” Diess says.

But all the good vibes in the air won’t put drivers behind steering wheels.

“We have to see some action,” Autotrader.com analyst Michelle Krebs tells Bloomberg’s Lippert. “They keep talking about where they want to be with sales, but there’s still no plan for taking care of the customers they have, and to win back the customers they’re losing.”

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