By on March 12, 2016

 Volkswagen Golf family

Volkswagen has been on the ropes for months as regulators, governments and the buying public rain blows in the wake of the diesel emissions scandal, but its newest foe might come from the inside — its U.S. dealer network.

American dealers are feeling abandoned by their distracted German parent and could be on the verge of open revolt, Automotive News reports.

The problems facing the dealers are many.

After investing $1 billion over the past decade to expand and upgrade the dealer network — part of Volkswagen’s plans to sell 800,000 units per year in the U.S. and become the world’s largest automaker — sales have fallen to less than half that number.

In addition to the recalls, the stop order on new and pre-owned diesel models and Volkswagen’s delay in finding a diesel fix, problems have cropped up in the supply and allocation process.

Now that the man who kept the dealers placated from the outset of the scandal is gone, an even bigger problem exists for Volkswagen management. Michael Horn, president and CEO of Volkswagen Group of America, stepped down suddenly on March 9, leaving dealers without their biggest champion.

To have their concerns heard, Alan Brown, head of Volkswagen’s national dealer council, plans to lead a delegation to Germany this weekend to get promises on product strategy and volume in writing.

“We’ve got to stop the insanity,” said Brown, who predicts a revolt at the March 31 National Automobile Dealers Association convention if Volkswagen doesn’t respond to their satisfaction.

Volkswagen is already facing lawsuits from a range of litigants —  not the least of which is the United States government — but there’s now a very real possibility that dealers could also join the fray.

Steve Kalafer, the outspoken owner of a 17-franchise dealer network, has stated that a Volkswagen dealer group is definitely planning to go after the automaker.

[Image: Volkswagen of America]

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132 Comments on “U.S. Volkswagen Dealers Are Poised to Revolt...”


  • avatar
    Sam Hall

    So am I right in thinking that this dealer revolt is probably the best sign that chaos reigns at VW HQ? Because the dealers are their customers, and if nobody is paying attention to the customer, then what’s going on?

    Or has VW always failed to pay attention to its US dealer base?

    • 0 avatar
      JimZ

      they probably just view us stupid Americans as mere annoyances.

    • 0 avatar
      Pch101

      VW doesn’t have the money to give them what they want. It’s not complicated, just too expensive.

      • 0 avatar
        RobertRyan

        VW will start shutting down the plants in the US. Other ” transplants” will think if the US can go in so hard, on the issue, it will eventually happen to them and rethink building in the US. Mexico seems a much safer bet at this point in time.Maybe a fair bit of localised negative financial impact for those Southern States, but VW can like Apple and Google drag this through the courts for years, and will be better for VW and it’s very large workforce outside NA to leave
        If Trump becomes President, a lot of companies will be wondering if the same thing will happen to them.

        • 0 avatar
          Quentin

          Nothing about the VW scandal is in any way related to where other transplants will build and their future factory planning.

        • 0 avatar
          George B

          RobertRyan, you are truly clueless. Volkswagen’s problems come from arrogant Germans, not the one factory in the US. Volkswagen always needed to greatly improve the long-term reliability of its cars and offer a longer warranty. The Hyundai strategy. Instead, they chose “Clean Diesel” to get Americans to buy their cars. When they couldn’t make their diesel engines meet tough US pollution limits at a price point American consumers would pay, they cheated. Hard to do, but Volkswagen managed to make their trust deficit even worse.

          • 0 avatar
            RobertRyan

            Yes, I knows ll that, but it is not going to stop VW moving elsewhere.

          • 0 avatar

            RobertRyan, what you are saying makes no sense. VW is in trouble because of where they *sell* their cars, not where they *make* them. Those aforementioned lawsuits have nothing to do with their US factories and everything to do with the product (much of which is made in Mexico and has been for a long time) that is sold in the US.

            Are you expecting the US to desert its factories just to prove a point? That’s not how companies act. VW will keep their factories open as long as their investments and operating costs makes sense to keep them open, its just a matter of the balance sheet. Little to do with the dealers, little to do with these lawsuits. Or are you suggesting that VW is going to leave the North American market completely?

          • 0 avatar
            RobertRyan

            @George B.
            “Are you expecting the US to desert its factories just to prove a point? That’s not how companies act. VW will keep their factories open as long as their investments and operating costs makes sense to keep them open, its just a matter of the balance sheet. Little to do with the dealers, little to do with these lawsuits. Or are you suggesting that VW is going to leave the North American market completely?

            Well, they will do the former and they will abandon the US market, going by the rumblings in Germany. Problem is the supply chain for other manufacturers who have set up the Southern United States

  • avatar
    ajla

    These dealers should stop acting like whiners and “victims”.

    If they think know so much much about being a manufacturer then they should start their own OEM.

    • 0 avatar
      JimZ

      yes, because getting upset over being stuck with millions of dollars of unsellable inventory (which you’re still paying the floorplan financing on) while VW hems and haws and does nothing is “whining.”

    • 0 avatar

      Genuinely confused at this statement, especially since Volskwagen doesn’t know how to be a manufacturer at this point.

    • 0 avatar

      This is a case of the other shoe dropping before the first shoe hit the ground. I’ve always thought VW is in peril over the faulty cars they sold to consumers. That’s a class action lawsuit that is going to cost them some serious jack. Dealers are the second class of people that have been harmed. A lot of them won’t survive and it will be easy for them to prove damages.

      If the dealers sue and win their case, consumers are in an even better position to win their lawsuits. The down side for consumers may be that there’s no money, or a reduced amount, left to distribute.

      Either way there will be a tiny VAG left compared to what it is today. Assuming VAG survives at all.

      • 0 avatar
        mazdaman007

        Too big to fail in Germany/Europe I think (a la GM/Chrysler in 2008/09) but their US presence I would say is very much in doubt. If the US goes then I would think it will be hard to justify a remaining presence in Canada as well.

        • 0 avatar
          RobertRyan

          Several potential problems: How will VW ‘s departure affect the parts supplies, for other ” transplants “in the Southern US? Trump and Clinton both have a anti- foreign car parts agenda, Trump really has an axe to grind over Mexico, .NAFTA finished? Bernie Sanders wants to kill off the TPP. A lot of very interesting times ahead

  • avatar
    Hummer

    Wait does Steve K. own 17 different dealership franchises or 17 VW dealers?

  • avatar
    Master Baiter

    Opening a business involves risk. If you want a risk free job with a cushy pension, work for the government.

    • 0 avatar
      JimZ

      so let me get this straight. You honestly believe that the dealers’ woes- directly caused by willful corporate malfeasance on VW’s part- are just “the risks of doing business?”

      • 0 avatar
        Hummer

        If you want to start a dealership, and you sign to a company like VW or Mits, then yes you realize it’s a major gamble, VW has never been a major player in the US, and more importantly has never built anything to American tastes, it’s really not hard to see either of them failing and leaving you empty handed. Regardless VW is too bone-headed to leave so it’s not like the dealers are losing everything, this isn’t an AMC-eagle type deal by any stretch.

        No one forced these people to sign with VW.

        • 0 avatar

          Some VW franchise owners have had the brand for decades and have stood by the company they retail.

          They’re saddled with high-margin, high-profit inventory that is literally unsellable – yet still eating through floorplan

          They’re riddled with a brand tainted by lies, omissions, and deflection. You think GM or Toyota dealers had the same after-effects because of the ignition and acceleration debacles? No. Because those companies dealt with the problem head on and moved on. VW isn’t.

          • 0 avatar
            George B

            Flybrian, GM and Toyota had defective parts that could be easily replaced once the updated parts became available. Consumers could be reasonably certain that their cars would perform the same after the old parts were eventually replaced. In contrast, Volkswagen has a larger engineering problem with their emissions control systems, no solution ready to go, and lots of uncertainty on how the cars will perform after new emissions control systems are installed. On top of this, nobody trusts Volkswagen because they’ve cheated on this issue. Everyone will go slow and double check everything Volkswagen does. Volkswagen’s customers, its dealers, are stuck with inventory that they can’t sell and no story they can trust.

          • 0 avatar
            Whatnext

            What unsellable inventory? How many new 2015 TDI’s are in dealer hands? VW already announced a buyback from dealers of CPO cars that were affected.

        • 0 avatar
          natrat

          hummer,that’s a bit shallow as there is actual criminal malfeasance involved here

        • 0 avatar
          Glenn Mercer

          That’s true, no one forced them to sign up with VW. But let’s step back from the usual TTAC Commentariat absolutism. Yup, they signed up of their own free will. But that doesn’t mean they at the same time signed away their right to complain when they see VW failing them, especially if they signed up decades ago: there isn’t some sort of pledge of Uncomplaining Silence in the contract. Especially as VW in the past DID do a better job. I don’t think it’s fair to say VW “never” built anything to American tastes: in 1968 VW was selling over 500,000 units annually in the USA, had achieved a 5% market share, and was outselling all other imported vehicles combined.

        • 0 avatar
          RobertRyan

          @Hummer,
          Very recently VW Management, has been making threats about leaving the US in Germany. I predicted that would be their next move a month or two ago.

        • 0 avatar
          Steve Biro

          VW was indeed once a player in the U.S. – but it was during their air-cooled era that ended around 40 years ago. They’ve been generally confused about this market since then and have been too arrogant to understand the problem lies with them. Presumably, there’s no one around today from that time who can help VW see the light.

          BTW, the VW dealer near me in central New Jersey – part of a larger, profitable auto group – has closed its doors and the building and lot are empty. I think this is just the beginning.

        • 0 avatar
          motormouth

          …and more importantly has never built anything to American tastes

          Thw latest North American Passat is considerably different to the model built anywhere else in the world to cater to American tastes.

      • 0 avatar
        R77777

        Yes, business is nothing but risk. And one correction, the “woes” were caused by our Uncle looking out for the greater good by preventing us from buying what VW was able to produce; a modern, powerful, clean-running diesel. Period.

    • 0 avatar
      John

      What a load of clap-trap from ajla and Master Baiter. Yes, the free market involves risk. No, the free market does NOT permit deliberate fraud and cheating. The free market ONLY works if people play by certain agreed-upon rules. If not, the market degenerates into a criminal thugocracy. Get a load of this – I can establish a company, produce a product, and try to sell it to you – and you’re free to buy it, and make me a success – or not. I can’t sell you food for your baby that turns out to be full of toxic waste, and I can’t pull a gun on you and demand your wallet and watch – unless I am prepared to go to prison. Volkswagen’s actions are fit into the latter category, not the former.

      • 0 avatar
        ajla

        IT WAS A PARODY JOKE!

        Apologies for being so obtuse in my intent.

        Now I get why so many people use the “/sarc” and “/joke” callouts on here.

        • 0 avatar
          JimZ

          you have to. Text does not convey intent or meaning. Poe’s Law strikes again.

        • 0 avatar
          30-mile fetch

          I caught your joke right off, ajla, I thought the parody was pretty obvious.

          • 0 avatar
            NickS

            Without an emoticon or smilie or other clue, it is next to impossible to derive the tone of a comment. It’s 2016, why is this not obvious?

            @hummer — VERY weak argument.

          • 0 avatar
            30-mile fetch

            Printed satire has been around for…well, long before emoticons. Why is this not obvious in 2016? Well, partly because of reliance on emoticons :)

          • 0 avatar
            rpn453

            I don’t see how the suggestion that a local businessperson simply start their own car company could be construed as anything but satire.

          • 0 avatar
            NickS

            OK, but if anyone commented BEFORE March 12th, 2016 at 12:59 pm that it was satire it would be more convincing.

            After that point, we all get it.

    • 0 avatar

      Working for government is a long term risk. They will not get what they expect to get in retirement. Government is already running into insolvency. It is just matter of adding another 8 trillions into debt. Unfortunately the whole country will be affected.

    • 0 avatar
      FreedMike

      Yes, if you own a dealership, it’s a risk, like any business.

      But any risk is based on the risk taker being appropriately informed of that risk.

      VW didn’t tell its dealerships that the products they were selling were defective and illegal, and that this would destroy their businesses.

      There’s risk, and there’s fraud. VW has done the latter.

  • avatar
    Whatnext

    So this would seem to indicate Horn left VW in disgust and the dealers feel there is nobody looking out for them now. VW needs to swallow it’s pride and do a buyback and quickly bring this to a close. And they need that three row CUV now to give dealers a new product.

    • 0 avatar
      Pch101

      It would seem that those of you who keep talking about buybacks as an ideal option have failed to consider how much that would cost and that VW doesn’t have the money to do it.

      • 0 avatar
        John

        Ever heard of borrowing money? It’s a thing.

        • 0 avatar
          Pch101

          When the return on investment for the borrowed proceeds is negative, lenders will not rush in to provide the cash.

          So, no, that doesn’t make much sense. VW is fighting and stalling because it doesn’t have much choice.

          • 0 avatar
            Whatnext

            I’m not sure why you’re painting this as billions and billions of dollars. VW’s last estimate was 115,000 US cars that couldn’t be easily brought into compliance to EPA standards. That’s hardly going to break the bank.

          • 0 avatar

            –> WHATNeXt

            It is billions and billions. When the courts get these cases, they’re going to make both the consumers and the dealers whole again if they can. And beyond that, there will be huge punitive damages. Count on it. And it’s going to repeat itself over and over and over, in every country VAG does business in.

        • 0 avatar
          JimZ

          you have to be a “good risk” before creditors will lend you money.

      • 0 avatar
        natrat

        no doubt and the justice department is now getting involved for another 50-100 billion with some obscure law meant for banks, someone is so out to get this company

      • 0 avatar
        Glenn Mercer

        I don’t disagree with your point, as buybacks would be very costly indeed. Agreed. However, I will note (not that you implied this, but I think many people believe this) that buybacks would not be a total loss (e.g. X cars bought at Y dollars = XY loss). In the past when OEMs have bought back cars that fail various US standards, they have been able to export them to other countries where the standards don’t apply, and resell them. So if a Eos or whatever is bought back at $10,000, possibly $5,000 can be recovered in this way. Still huge sums — that is why I agree with your point — but I wanted to provide some context around them. I remember speaking with an EPA guy a couple of years back who said “We don’t care where [ non-compliant ] cars go, as long as they leave the USA.” Kinda shocked me at the time, but makes sense within EPA’s remit.

        • 0 avatar
          George B

          Volkswagen also has the option of doing a targeted buyback from its dealers. For example, they could buy only Jettas without urea injection from the CARB emissions states combined with some factory-to-dealer incentives to get those customers to buy a gasoline or hybrid Volkswagen. That helps their customers, the dealers, out of a bind.

          Once Volkswagen clears unfixable Jettas from California and other CARB states, they can propose software changes for the rest of their diesel cars. Ironically, the bigger the performance hit with the new software, the more likely consumers refuse the “upgrade”, saving Volkswagen money.

      • 0 avatar
        Whatnext

        If FCA could afford buybacks, you can bet VW can.

        • 0 avatar

          modest proposal #1
          125% of Bluebook for trade-in of diesels towards new VW(or 150% or whatever)
          modest proposal #2
          90% of original 2015 diesel purchase price towards new VW,80% of 2014s,70 percent of 2013s and so on to 30% of 2009s’ purchase price.

        • 0 avatar
          Pch101

          Er, a buyback program of the sort that you are suggesting could easily cost $12-15 billion. A lot of that could be barely recouped through dumping the cars abroad (and that would come at the expense of new car sales.)

          And that doesn’t include all of the other costs, such as litigation and fines.

          No, VW cannot afford that. That’s a nuclear bomb and could very well push VWoA into bankruptcy. VW is avoiding all of this for a very obvious reason — it can’t pay for it.

      • 0 avatar
        Acd

        I’m not interested in selling my TDI back to Volkswagen or anyone else. Many TDI owners are happy with their cars as they are.

      • 0 avatar
        here4aSammich

        Clearly its the only option, and clearly VW doesn’t want to do it. Yes its going to be expensive, nad yes the terms of the loans they’ll have to take to make it happen won’t be favorable. But there was a time that Ford mortgaged everything right down to the blue oval to keep the company afloat. It may take that kind of action to save VW.

        • 0 avatar
          Pch101

          If VW did a complete buyback program, the rating agencies would probably respond by downgrading the bonds to junk. (As it stands, Moody’s and S&P have already downgraded the bonds, and both have a negative outlook.)

          You can’t borrow money on favorable terms when your bond rating is junk and your outlook is negative. A token buyback program could be manageable, but a complete buyback program would be a financial disaster and the cost would not be recoverable through future US sales.

          No, it behooves VW to negotiate with the feds as much as possible.

      • 0 avatar
        RobertRyan

        Last thing they are even thinking. buy backs are not on the agenda. A Quick fix like they have done with the Amarok, yes

        • 0 avatar
          DenverMike

          The Amarok fix is an absolute joke. Only in Australia, where diesel emissions are also a complete joke. The Amarok fix does zero to clean its emission. Laughable even in Europe.

          If it was a real fix, Australia would be the last place to get it.

          • 0 avatar
            Pch101

            To be fair, Australia will be up to Euro 5 later this year and Euro 6 after that. (Of course, that will still put them behind the US, but at least they’ll be better than they are now.)

          • 0 avatar
            RobertRyan

            Still US Diesels have to be modified to be sold here, if they want certification to allow them to sell the more than 100 quota

          • 0 avatar
            RobertRyan

            You have posted this before and are completely wrong as usual. US spec Diesels do not meet Euro V pollution regulations and as such cannot be sold here, restricted to 100 units

          • 0 avatar
            DenverMike

            US diesels have to be “modified” how, exactly? To increase polluting just for OZ?? Who exactly says so, especially when US diesels already have overkill emissions equipment, for what’s required in Australia???

          • 0 avatar
            Pch101

            I realize that it is fruitless to communicate to illiterate people in writing, but whatever:

            ______

            In the wake of the emissions scandal that has engulfed Volkswagen in the United States and Europe, it’s worth asking: how do Australia’s standards stack up? The awful truth: we’re literally years behind Europe and the US…

            …In the United States the standards (referred to as the Tier 2 program) are ****more stringent**** than Euro 6…

            http://theconversation.com/australias-weaker-emissions-standards-allow-car-makers-to-dump-polluting-cars-48172
            ______

            This stuff is only difficult to understand for dumb bogans who manage to spend enormous amounts of time online while failing to learn a damn thing.

      • 0 avatar
        jthorner

        VW can’t afford not to do it. How much goodwill could they have created by biting the big financial bullet up front?

        VW debt already deserves junk status. The rating agencies are always slow to recognize big changes of status.

        • 0 avatar
          Pch101

          This is akin to me suggesting that you address your need for transportation by buying a Bugatti Veyron, then snorting at you when you point out that you can’t afford one.

          VW doesn’t have the money to do what you’re suggesting, which makes it a non-starter.

        • 0 avatar
          DenverMike

          No not all at once, but say 5,000 a month, starting from the oldest “cheater” TDIs on the road, from only those owners ready and anxious for a buyback. This would give back considerable confidence to shareholders, dealers, current and future VW owners/buyers, etc, and to the VW “brand” itself.

          This while giving VW corp time to digest the buyback VWs, raise corporate funds/profits, plus acquire corporate loans from confident lenders.

          But it has to be VW’s current inaction and ambivalence that kills the most, besides the blatant, defiant arrogance.

          • 0 avatar
            Pch101

            The US recall impacts 680,000 vehicles.

            If you recall 5,000 units per month, then it would take 12 years to complete the recall.

            No, that ain’t gonna work.

          • 0 avatar
            DenverMike

            OK, increasing to 10,000 a month, then more, but the point is, it would show good faith. And it’d go a long way toward restoring the VW brand and calming down all sides. Maybe even the EPA. Of course it wouldn’t be the total plan or “fix”, but a huge part and important first step.

            Seems like a third to half of TDI owners don’t want to give theirs up anyway. Force their other (2nd) cars to be all electric or something, combined with other VW concessions.

        • 0 avatar
          RobertRyan

          So they can meet at least Euro V regs other wise they have the 100 quota. You already no this as you have asked the same question on two forums.

  • avatar

    Bert Smith VW just had a grand opening for its brand-new standalone monolith to a dead brand walking. What a beautiful home it would make for a future church, boat dealer, or furniture gallery.

  • avatar
    RedRocket

    “Herr Müller, the American dealers are revolting!!!”

    “Ya, they certainly are. Now, pass the strudel.”

  • avatar
    R77777

    VW should immediately announce that they will no longer play in the American sandbox, due to overbearing, anti-capitalistic regulations. Tell the world that they have grown a spine and are closing all franchisees, all factories, all offices in the USA in 60 days unless Big Brother agrees to the proposed fixes. Give the EPA the middle finger. Then we will see who our Uncle is really looking out for, American workers and businessmen or fractionally cleaner air.

  • avatar
    smartascii

    Dieselgate has just moved the inevitable forward. Volkswagen had no shot at selling 800,000 cars in this country before dieselgate, and they’ve got even less of a shot at it now.

    More than half the new vehicle sales at the present are trucks, SUVs and CUVs, and VW offers the Tiguan and the Touareg, neither of which are appealing entries for either price-point shoppers or luxury shoppers.

    Their cars are an aging collection of Burger-land specials built to a price point that STILL cost more than comparable offerings (unless you get the $139/mo Jetta S lease special, and I cannot think of another new-car offering that so aggressively shames you for being cheap). The Golf/GTI/R are pretty good cars, but they’re hatchbacks, and they’re expensive.

    Instead of using the Q3/Q5/Q7 model and leveraging their modular architecture for an immediate influx of Cute Ute options, they’ve been rebranding their station wagon, and while I’m sure that all 7 prospective wagon buyers nationwide have taken notice, this will not sway a single SUV buyer, even if they slap on a 2″ lift and a cartload of plastic cladding.

    The only thing that was ever going to save VW was a massive product revamp and a re-brand as the Huyndai of German Luxury alongside a bumper-to-bumper focus on reliability. Unfortunately, Hyundai is creating the Genesis brand and has a 10-year warranty, so it looks like VW may be too late to that particular party.

    • 0 avatar
      sportyaccordy

      Day late, dollar short. New Tiguan is about 5 years too late, and the 3 row spinoff from it is probably a decade late. With Dieselgate underway even interested customers like myself are giving pause.

    • 0 avatar
      NickS

      Congrats, 100% spot on.

      FYI, I am probably one of those 7 prospective wagon buyers, but I’ve waved off everything VW offers.

      If they managed to package an audi Q# as a VW offering I might reconsider. Regardless, the warranty had better be at least 5/50K.

    • 0 avatar
      RHD

      Now if you removed the VW and Jetta logos. and put Skoda and Octavia logos on there, the car would suddenly be practical and its shortcomings logical, since it’s just a very inexpensive Skoda.

    • 0 avatar
      DrSandman

      I agree with every word @smartascii, including “a”, “and” and “the”.

      The petrol engines are a collection of plastic-fantastic, future warranty claims waiting to happen; the diesel were the only ones I was interested in (no more); and, I can buy a better car for 2/3 the money from a bailed-out (with my money) US manufacturer in every single segment.

  • avatar
    mfgreen40

    Its hard for me to feel compassion for VW dealers because of the way they treated their customers in the 1970s!!!! Yes , it has been that long since I have visited them. As I remember You paid full price and were expected to give them a kiss and tell them how thankful you were to be able to buy a car from them.

    • 0 avatar
      highdesertcat

      “expected to give them a kiss and tell them how thankful you were to be able to buy a car from them.”

      LOL. That seems to be the current attitude of Toyota dealers.

      But in the case of Toyota dealers, they know they have truly outstanding products that sells itself, so people just line up to buy them.

      And those Toyota buyers just keep a-comin’. Not so for VW dealers.

      There isn’t even a VW dealer within 120 miles of where I live. Many GIs who bring back a new VW from overseas trade them off within two years for something with a dealer nearby.

    • 0 avatar
      psarhjinian

      The reason VW dealers are as bad as they are is because they were given absolutely no support for Corporate.

      A counterpoint is Saturn*: they scored much, much better than most GM divisions in customer satisfaction. It isn’t because of the free coffee and donuts, and it sure wasn’t because of the cars themselves: it’s because GM gave Saturn dealers nearly carte blanche to fix their customers’ issues and compensated them well for warranty work.

      Similar improvements in customer satisfaction happened at Ford and Chrysler when they stopped being such total tightwads with their dealers.

      VW never learned this. To be fair, the other Europeans didn’t, either, but VW has the most exposure and doesn’t sell a premium product that excuses such behaviour. They’ve been f*cking their dealer body (hell, VWoA has been getting hosed by head office, even) for years; as such, dealers need to make money where they can—which means “at the customer’s expense”. If they weren’t screwed so hard, they wouldn’t be passing the screwjob on.

      * Lexus, too, but Lexus has margin to play with.

    • 0 avatar
      FreedMike

      If it’s hard to feel compassion for the dealers, it’s easier to feel compassion for the folks who work for them. I mean, some mechanic at Joe Smith VW in Burpleson, Alabama didn’t make the corporate decision to purposely cheat emissions regs.

      But he’s out on his ass anyway.

      And whatever you feel about the dealers, they weren’t the major violators here. They’re as much a victim in all this as the folks who bought the cars…maybe even moreso, because they have millions of dollars tied up in these businesses.

  • avatar
    Joss

    After Cameron’s switch away from the World Bank to China’s Asia Infrastructure Bank, Obama praised -Merkel- as the new voice eh-hem PARTNER in Europe. There could have been an avenue of rectitude there for the VW NA group. But Obama’s an outgoing prez and there’s more unfolding to be done…

    Govt-wise it’s basically Cali & Capitol Hill after VW with the huge fines.

    • 0 avatar
      natrat

      almost as though the invisible hand of the shadow government wants to weaken europe with millions of middle eastern criminals and skyrocketing unemployment. This theory will be tested when vw gets closer to the edge and the german govt either bales them out or not

  • avatar
    Robbie

    Just before the scandal broke, I overheard a VW Customer Representative tell a 55 year old lady who was in the warranty period for her car to “try a higher octane gas”. It is hard to feel sorry for the VW dealers.

    If VW had managed them properly, perhaps VW would be at a decent sales level pre-scandal.

  • avatar
    seanx37

    So VW and Fiat dealers are in revolt. I assume the last remaining Dodge dealers who are being starved to death will counter attack soon. Must be a crappy time to be a dealer not selling Toyotas, or Chevy trucks.

  • avatar
    Notadude

    I wonder what would happen to Audi and Porsche if VW really did leave the US. Would they leave too?

    • 0 avatar
      derekson

      A. There is zero chance of VW withdrawing from the US market.
      B. Why would massively profitable (and fairly popular for their market price) brands leave the market due to another brand in the corporation leaving (which again, will never happen)?

      • 0 avatar
        SCE to AUX

        Not so. VW’s US sales are heading into Mazda territory, except in the opposite direction.

        We have yet to see what the cost to VW will be for the car fixes, fines, and litigation. A cash-broke VW cannot sustain robust worldwide operations. Its US presence is small, and comprises a small fraction of its overall sales.

        I can definitely see them ceasing US operations if the company is going to founder.

      • 0 avatar
        RobertRyan

        True, they will not leave unless forced, but production would cease in the US

    • 0 avatar
      SCE to AUX

      Good question.

      My BIL’s 2010 A4 has been burning oil at the rate of 200 miles/quart, with only 50k miles on it.

      He’s been an Audi disciple for years, but he’s underwater on the A4 and the dealer is no help.

      Quality problems like this are not helpful to the brand.

      • 0 avatar
        highdesertcat

        “My BIL’s 2010 A4 has been burning oil at the rate of 200 miles/quart, with only 50k miles on it.”

        Not just the A4. Have heard stories from others with the same engine ailment, even in different brands.

        The fix is to step up the viscosity of the motor oil, i.e. from 0W-20 to 5W-30, or from 5W-30 to 10W-40.

        A 2014 Grand Cherokee that belongs to my sister-in-law blows a cloud of blue smoke at startup, since it was bought new. Her husband ended up using 20W-50 to stop the oil burning.

        Gas mileage may go down a little with the heavier oils but who cares? Gas is cheaper than motor oil.

        • 0 avatar
          Jimal

          The Audi fix ultimately is to replace the pistons and rings, if not the entire engine. It is routine job at Audi dealers. The question becomes who pays for it and how much goodwill can the dealer extract from Audi?

        • 0 avatar
          VoGo

          I am having difficulty working up sympathy for someone underwater on a 6 year old Audi. Experiences like this are how people learn to make smart decisions.

    • 0 avatar
      jthorner

      Audi and Porsche are highly profitable in the US. I doubt they would leave.

  • avatar
    Jimal

    There is nothing in the story that supports that headline. So a group of dealers is going to Germany to get some promises in writing. Where is the revolt?

  • avatar

    Anyone notice Volkswagen using a new font in their TV ads?

    The company’s advertising has had a characteristic tone for nearly 60 years. Even the fonts they’ve used from the “what car does the snow plow driver use to get to the snow plow?” ad of 1964 to Fahrvergnügen to Das Auto, the campaign they were running when the scandal broke, were part of that image.

    Underlying message, carefully cultivated over 60 years?

    We’re different. We’re the good guys. We’re honest. Straightforward. No BS. Lookin’ out for you.

    Not even Toyota’s worn it on their sleeve the way VW has.

    Sixty years of goodwill all blown out of the water. The thing upon which the dealers could hang their hat, thrown under the bus and hit by a freight train for good measure.

    So I’d be a little PO’ed too. Because in a world where perception is reality, and VW’s perception was honesty, what are they now?

    Just another car company.

    This shall get uglier before it gets better.

    • 0 avatar
      Von

      The message might have been cultivated for 60 years, but it was certainly not widely executed for any length of time. In the internet age, you can’t just advertise more and expect people to take it at face value, except maybe Mitsubishi buyers.

    • 0 avatar
      Jimal

      The font changed about a year ago, well before Dieselgate was uncovered. The big change in reaction to Dieselgate was the removal of the “Das Auto.” tagline.

      And all that goodwill you are referring was burned through at least 15 years ago, if not longer. There is a reason VW was bit player in the States.

      • 0 avatar
        Steve Biro

        Yeah, I’d say most of VW’s goodwill in this market was burned through by the 1980s. The golden years for VW were the air-cooled years. Then the Rabbit and Dasher arrived in the mid 1970s. While those cars were certainly fun, they didn’t prove to be very reliable or long-lasting. It took 5-to-7 years for many people to figure that out and it’s been downhill ever since with VW being reduced to bit-player status in the U.S. Every once in a while a friend or colleague of mine would delude themselves into buying a VW despite my warnings. And every one of them would dump the car a couple of years later – bitter and disappointed.

  • avatar
    360joules

    This whole debacle has been astonishing. I’ve seen the VW faithful in my personal finally decide to jettison the brand after years of repeated purchases from VW – even the non TDI-owners.

  • avatar
    dougjp

    At this point its prudent not to buy a VW or Audi until there is more clarity about the future. Its too big an expenditure to gamble on.

    Face it, at the simplest level the complexity of demands on (remaining?) dealers’ service departments to fix the diesels is still unknown but thought to be major. That alone raises the question of what timely and complete warranty service and service availability you can expect on your new gas powered car.

    Then there’s the question of dealer location, what if your only Audi or VW dealer within 25 miles closed up shop and/or took their land and buildings to operate some other manufacturer franchise, being able to do that based on a claim of breach of contract by VW? I can think that would be easy to prove.

    • 0 avatar
      jthorner

      Fact is, the cars cannot reasonably be fixed.

    • 0 avatar
      White Shadow

      It’s thinking like this that is allowing me to get a fantastic deal on the purchase of my new Audi. I really believe there is zero risk to buying an Audi right now.

      • 0 avatar
        VoGo

        “I really believe there is zero risk to buying an Audi right now”

        Said absolutely no one who has ever owned an Audi out of warranty for an extended period of time.

        • 0 avatar
          NoGoYo

          I was a bit worried my merely photographing an incredibly rare 5000/100/200? (it had no number badges…) wagon would cause it to break.

        • 0 avatar
          JimZ

          honestly I think the real problem with Audis isn’t that they’re excessively failure-prone, but that when stuff *does* break it’s a royal pain in the ass to fix. it’s like the adage “German Engineering: Why use *one* moving part when you can use *12* instead?” as an example, their V6 and V8 engines. Not only do they have a ridiculously complicated timing chainset, but they gave them failure-prone tensioners. Ok, well, other manufacturers have had problems here and there with tensioner failures, but Audi takes it all the way up to 11 by putting the timing chainset on the BACK of the f***ing engine.

          Ford did the same thing when they had Köln redesign the 4.0 V6 from pushrod to SOHC. It has three timing chains; one from the crank to the intermediate jackshaft, then one from the jackshaft to the left camshaft on the front of the engine, and one from the jackshaft to the right camshaft on the BACK of the engine. And of course, the first few years of that engine they had early tensioner failures.

  • avatar
    jthorner

    First, VW should buy back all of the fraudulent cars. They should have done so months ago. Their ongoing attempt to “manage the problem” instead of fixing it the only way it can actually be fixed continues to damage the company.

    Second, they should refer everyone who approved the fraud to the relevant criminal authorities and let those cheaters pay for their own legal defense.

    Then they could get back to business with whoever is left.

    • 0 avatar
      NickS

      Well, agreed, but in reality who gets to stay and who is let go doesn’t have much to do with what they knew, or how they acted. VW is planning to lay off 3000 admin, and that is a financial decision not connected with which of them approving the fraud, at least on the face of it, because if indeed those 3000 were implicated, vw’s entire management board would have no plausible deniability and would be in jail.

  • avatar
    Polishdon

    Wild thought of the day……

    If VW decides to retrench to Europe, but could decide to keep their plants in case they decide to reenter market.

    But for what Can’t just leave them empty ???

    FCA is looking for someone to build 200’s and Darts. Both FCA and VW are familiar with farming out production……

    VW starts building 200’s and Darts, maybe even using VW platforms…..

  • avatar
    kenwood

    What the heck are the dealers gonna do? Stop ordering new cars? Then their customers will go elsewhere and then it’s bye-bye sales.


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