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He’s going on about branding again….

01 Oct

I drive a VW Jetta TDI.
The TDIs are interesting cars in the US because they use diesel engines rather than gasoline. Diesel has long been used in cars and trucks, but it was dirtier and louder than gas engines. Recently, however, diesel has made a comeback with the advent of high milage ‘clean diesel.’ VW has been a big promoter of this trend offering TDI models of many of its cars.
We’ve been happy with the performance of our car for the past six years in many ways. It isn’t loud, like earlier diesels, it gets great milage (typically around 40mpg) and it has a lot of power for a small engine.
Then the news broke.

VW was found to have manipulated its onboard computer in a manner than outmaneuvered emissions tests. How is VW going to solve this problem? This meant that it wasn’t as clean as it was thought to be and owners are now wondering whether fixing the emissions problem will hurt the milage or performance of their cars. Also, will resale values plummet?

NPR’s All Things Considered looked into this with a number of TDI owners…
http://www.npr.org/player/embed/444719948/444790918

From All Things Considered, “Volkswagen owners wonder where a fix will leave them”
Previously, I’ve talked about brand image and how this scandal will affect VW’s brand identity. Judging from the NPR clip, a number of TDI owners are struggling with the same thought. None of them – or rather, us – want to drop our identity with this brand so quickly. And this pause gives VW a moment to make it’s move to save the brand.

And, at this moment, the brand is what’s at stake. Business is important, but short term planning could kill the long term prospects for the company.  Will the company listen to short term investors that have been dropping the stock:

Screen Shot 2015-10-01 at 9.01.41 AMOr, will they take a long view and rescue the brand at the expense of short term profits?

In the news article above, Steve Berman is a lawyer who filed a class action lawsuit on the day of the news and has since had 8000 inquiries about the case.

Already, the window of opportunity is closing of VW. It needs to look into itself and ask, what is it about us that has made us successful? What is our brand about?
Originally conceived as a ‘car for the people’, VW offered a sturdy, dependable car for an affordable price. VW has cultured a brand over many decades to target customers who think of themselves as slightly out of the mainstream. These are customers that want their brand to be something they can be proud of – they (we) are a tribe.

The solution is for VW to own this problem.Regardless of price, it should devote itself to implementing a fix that does several things:
1) reassure its customers (the tribe) that the company will make it right . Then…
2) control emissions
3) maintain gas milage
4) maintain power
-or-
If 2-4 can’t all be done with these cars, then it should offer to take/buy back the cars (which it could fix and then resell with whatever hit to 2-4 is necessary) and replace them with a refined model that does provide a real fix. And it should do this at cost or below. It doesn’t have to be free. Killing the company doesn’t help anyone. But it should not be making money on this either. After all, the short-term stockholders are already gone. A quarter – or two, or three – without profits is acceptable in order to keep VW customers coming back in the future with the knowledge that they can rely on their tribe’s leaders to take care of them.

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Posted by on October 1, 2015 in Uncategorized

 

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