The news just keeps getting worse for Volkswagen. After the story of the German automaker’s international emissions scandal broke, everyone in consumer PR knew it would be bad. But it’s worse. November sales plummeted more than 25 percent. In the time of year every automaker is desperately trying to clear out old inventory to make way for new models, no one is buying.
And for good reason.
Back in September, VW was forced to admit it had installed software in several of its models allowing them to not only pass emissions tests but to do so while pumping out 40 times the allowed levels of pollutants. Yes, 40 times.
The EPA immediately ordered VW to stop selling those cars – mostly diesels – in the United States. Comparing this year to last, that segment would account for roughly 17 percent of total US sales. So, a 17 percent drop. So … what about the rest of that “more than 25 percent”?
That, friends, is the power of negative public relations. Even without the loss of those diesel models, VW sales have dropped an additional 9 percent. Sure, you could blame competition for that, or decreased excitement about VW models when compared to other brands.
But that doesn’t wash with the facts. Before the scandal broke, Volkswagen was on an absolute tear. Blasting past other automakers to become the biggest in the world. Guess someone, somewhere decided to cut some corners to keep them on top … and it cost them, big time.
Consumer confidence can sometimes be a difficult metric to quantify. But, in this case, it’s easy. Nearly ten percent more people bought Something Other Than Volkswagen in November. VW was selling, but they weren’t interested.
Why? Well, the first reason is simple. Consumers aren’t listening for details when they hear the news. They are reacting to the Big Words. When they hear “cheating” or “scandal” and the like, they react. It doesn’t matter to Joe Sixpack and Susie Boxedwine that VW didn’t cheat with non-diesel models. Doesn’t matter that other makes have also suffered scandals. What matters is the feeling they get when they hear or read “Volkswagen.” Right now, that feeling is “nope”.
If VW doesn’t find a way to re-engage consumer confidence, it could be a dark Christmas shopping season.
Juda Engelmayer's Blog 