An inconvenient truth is still the truth.
Things have erupted so fast its hard to know where to start.
Volkswagen AG (US ADR: VLKAY) lost 20% of its market cap on Monday and Tuesday saw its flagship stock drop another 18%, and this morning the CEO resigned. I know, I know, the contras are rushing into the market to pick up value sales. Don’t panic your broker says, but I’m not panicked at all: I’m pissed.
The Volkswagen brand finally reached their goal of 10MM annual unit sales last year, four years ahead of schedule. Its a wonder what selling a “green dream” to the world’s largest auto market will do to pump up sales. By the way, you can’t buy a TDI today – the premier diesel car from VW – in the US. At least not new: sales are suspended and dealers are stuck holding the bag.
In fact, VW won’t sell you any diesel in the US today because they can’t, the inconvenient truth of their lies about emissions presenting a sticking point. Bearish market sentiment is even hurting Daimler and BMW in Europe (does BMW even make a diesel?) and both the EuroZone and Latin America are taking closer look at the data VW has been relying on for over seven years to push its metal stateside.
Over seven years of planned obstruction in subverting true emissions to prove the “new” diesels are in fact “clean” have led to this debacle. The special value-added software (which partially explains the premium of over $2k per TDI vs a gas-powered Bug) only works when forced to, much like your husband. This software only engages when emissions are being tested. Like say for the EPA.
VW now admits, rather casually, that 11 million units (read: cars) are affected. Or infected perhaps. Why do you think they call them Bugs?
How am I so annoyed by these continuing outright and intentional criminal acts of deceit and fraud? I take it personally. The brand I trusted – who told me I could trust them – lied to me.
Over the past five years we’ve owned three TDIs. And I drank the Kool-Aid (much like I’ve done with Apple. If I use the product and like it, I’ll drink the Kool-Aid.) I drove TDIs for half a decade swapping and buying more. I cleaned them meticulously never letting a scratchy rag get near the body and vacuuming the rubber door strips. I fervently had the scheduled maintenance performed on time and fueled them myself every time never letting a drop of that expensive diesel drip.
I read the literature and did the math and told anyone foolish enough to get trapped by me how clean diesels were going to remake the driving scene in America and how my little Golf (the lovely Melissa) was decreasing my personal carbon footprint.
Däs Bullshit VW.
When you think about the value of brands (remember in two trading days VW lost a third – one-third! – of its total market cap) think about VW. Sure, others have abused our trust before: GM, Toyota, American Motors and more. But they’re not VW: they just made cars and advertised them never pretending they were somehow different.
They did not attempt to create an aura.
But VW pronounced it was doing a good thing and couldn’t stop talking about it. And therein lies the danger to both brands and to you and I. If you’re gonna drink the Kool-Aid, it’d better be real.
America is the land of forgiveness: people get second, and often third chances when they own up to mistakes. But VW didn’t make a mistake. Just like Bernie Madoff they systematically and methodically set out to defraud consumers and the government for their own profit.
Good luck VW: I’ll never buy one of your brands again.
Oh, and that Pinterest page I had with all those beautiful VWs new and restored? Deleted last week.