Volkswagen’s sales in Canada and the United States have collapsed in the wake of the unresolved “dieselgate” scandal that has rocked what was once the world’s No. 1 car company by sales.
VW’s February sales in Canada plunged 27.7 per cent; year-to-date sales are down 22.9 per cent. VW Canada has now lost 1.2 per cent of precious market share this year alone — down to 3.0 per cent, according to DesRosiers Automotive Consultants.
VW headquarters in Wolfsburg, Germany. At a time when sales are plummeting, CEO Mattias Mueller announced employee bonuses for 2015: “I am deeply impressed by the way our employees are standing by Volkswagen despite everything that has happened and how everyone is working to confirm the trust of our customers.”
In the U.S., VW’s sales have also been crushed by the emissions-cheating crisis; sales were down 14 per cent in February. VW has halted sales of the affected diesel vehicles, leaving them sitting on dealer lots or elsewhere.
VW’s tin-eared response to a catastrophe involving millions of vehicles worldwide remains a mystery. Nonetheless, this fiasco will come to a head on March 24 when, as The Wall Street Journal reports, VW faces a deadline from a U.S. federal judge to come up with a plan to fix the affected vehicles.
For months, VW has failed to resolve the issue with U.S. regulators and government officials have expressed frustration bordering on exasperation with VW. The Environmental Protection Agency and California Air Resources Board have said VW must devise an acceptable fix, yet VW has been unable or unwilling to satisfy regulators acting on behalf of consumers.
Not only must VW find a technical solution – one that company officials suggested in January was well within reach – but VW must also deal with demands that the company buy back affected vehicles or compensate owners in some other way. At the same time, various governments around the world are conducting criminal probes into VW’s actions.
On top of all that, the lawsuits against VW mount while heads within VW continue to roll. VW has announced that Michael Horn, the outspoken former head of VW’s U.S. unit, has departed, apparently a victim of his own candor regarding the scandal.
Horn publicly called for massive changes to VW’s culture months ago – a culture former General Motors vice-chairman described as “a reign of terror” under former supervisory board chair and CEO Ferdinand Piech. In a Road & Track blog, Lutz said Piech fostered “a culture where performance was driven by fear and intimidation.”
Last year Horn told a U.S. congressional hearing that VW “has to bloody learn and use this opportunity in order to get their act together, and 600,000 people worldwide have to be managed in a different way.” VW needs cultural change, in other words. Horn is now gone.
And lawsuits? VW faces the possibility of paying out tens of billions in settlements to consumers and investors alike. The latest: Bloomberg reports that the VW Group is being sued for 3.3 billion euros by a group of 278 institutional investors in Germany. They allege that the company failed to publish information about the emissions scandal in a timely manner. In other words, VW is being sued for a lack of openness.
In a speech to some 20,000 employees inside VW’s sprawling plant complex in Wolfsburg, Germany, Mueller confirmed bonuses for 2015. Those in factories in western Germany get a bonus of 5,900 euros each. Factory workers at VW’s Audi luxury unit in Ingolstadt and Neckarsulm get a bonus of 5,420 euros on average.
VW CEO Mattias Mueller, a long-time VW employee who came to the top job after a stint heading VW’s Porsche brand, at present appears more interested in circling the wagons at VW than finding a solution that will stop the corporate tire-fire and put the company on a path towards regaining consumer confidence.
In a recent speech to employees, he called for employee unity in this time of crisis. “Together, we must make the necessary changes to safeguard the future of Volkswagen,” he told more than 20,000 VW employees at a plant beside company headquarters in Wolfsburg, Germany. Missing from the speech was a commitment to a new era of openness at VW or specific proposals about how to change what appears to be VW’s ailing culture.
But events are starting to spin out of control. Regulators in the U.S. have shown impatience with VW’s inability to come up with a credible plan. With the March 24 deadline looming, however, stalling is no longer an option for VW.
Car shoppers, VW’s dealers, investors and regulators have grown weary of VW’s lack of progress towards a dieselgate solution. VW’s dithering leadership is, in fact, putting the very future of the company at risk.
Until we see technical solutions, a compensation plan for affected owners and signs of a healthy change in VW’s corporate culture, buyers should think carefully about buying any VW Group product.
Volkswagen’s sales in Canada and the United States have collapsed in the wake of the unresolved “dieselgate” scandal that has rocked what was once the world’s No. 1 car company by sales.
VW’s February sales in Canada plunged 27.7 per cent; year-to-date sales are down 22.9 per cent. VW Canada has now lost 1.2 per cent of precious market share this year alone — down to 3.0 per cent, according to DesRosiers Automotive Consultants.
VW headquarters in Wolfsburg, Germany. At a time when sales are plummeting, CEO Mattias Mueller announced employee bonuses for 2015: “I am deeply impressed by the way our employees are standing by Volkswagen despite everything that has happened and how everyone is working to confirm the trust of our customers.”
In the U.S., VW’s sales have also been crushed by the emissions-cheating crisis; sales were down 14 per cent in February. VW has halted sales of the affected diesel vehicles, leaving them sitting on dealer lots or elsewhere.
VW’s tin-eared response to a catastrophe involving millions of vehicles worldwide remains a mystery. Nonetheless, this fiasco will come to a head on March 24 when, as The Wall Street Journal reports, VW faces a deadline from a U.S. federal judge to come up with a plan to fix the affected vehicles.
For months, VW has failed to resolve the issue with U.S. regulators and government officials have expressed frustration bordering on exasperation with VW. The Environmental Protection Agency and California Air Resources Board have said VW must devise an acceptable fix, yet VW has been unable or unwilling to satisfy regulators acting on behalf of consumers.
Not only must VW find a technical solution – one that company officials suggested in January was well within reach – but VW must also deal with demands that the company buy back affected vehicles or compensate owners in some other way. At the same time, various governments around the world are conducting criminal probes into VW’s actions.
On top of all that, the lawsuits against VW mount while heads within VW continue to roll. VW has announced that Michael Horn, the outspoken former head of VW’s U.S. unit, has departed, apparently a victim of his own candor regarding the scandal.
Horn publicly called for massive changes to VW’s culture months ago – a culture former General Motors vice-chairman described as “a reign of terror” under former supervisory board chair and CEO Ferdinand Piech. In a Road & Track blog, Lutz said Piech fostered “a culture where performance was driven by fear and intimidation.”
Last year Horn told a U.S. congressional hearing that VW “has to bloody learn and use this opportunity in order to get their act together, and 600,000 people worldwide have to be managed in a different way.” VW needs cultural change, in other words. Horn is now gone.
And lawsuits? VW faces the possibility of paying out tens of billions in settlements to consumers and investors alike. The latest: Bloomberg reports that the VW Group is being sued for 3.3 billion euros by a group of 278 institutional investors in Germany. They allege that the company failed to publish information about the emissions scandal in a timely manner. In other words, VW is being sued for a lack of openness.
In a speech to some 20,000 employees inside VW’s sprawling plant complex in Wolfsburg, Germany, Mueller confirmed bonuses for 2015. Those in factories in western Germany get a bonus of 5,900 euros each. Factory workers at VW’s Audi luxury unit in Ingolstadt and Neckarsulm get a bonus of 5,420 euros on average.
VW CEO Mattias Mueller, a long-time VW employee who came to the top job after a stint heading VW’s Porsche brand, at present appears more interested in circling the wagons at VW than finding a solution that will stop the corporate tire-fire and put the company on a path towards regaining consumer confidence.
In a recent speech to employees, he called for employee unity in this time of crisis. “Together, we must make the necessary changes to safeguard the future of Volkswagen,” he told more than 20,000 VW employees at a plant beside company headquarters in Wolfsburg, Germany. Missing from the speech was a commitment to a new era of openness at VW or specific proposals about how to change what appears to be VW’s ailing culture.
But events are starting to spin out of control. Regulators in the U.S. have shown impatience with VW’s inability to come up with a credible plan. With the March 24 deadline looming, however, stalling is no longer an option for VW.
Car shoppers, VW’s dealers, investors and regulators have grown weary of VW’s lack of progress towards a dieselgate solution. VW’s dithering leadership is, in fact, putting the very future of the company at risk.
Until we see technical solutions, a compensation plan for affected owners and signs of a healthy change in VW’s corporate culture, buyers should think carefully about buying any VW Group product.
About the Author / Jeremy Cato
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