By on September 22, 2015

Picture courtesy Volkswagen

Amid slumping sales and a snowballing diesel-emissions crisis, Volkswagen announced Monday a plan to offer more money to dealers for cars that they can sell.

Over the weekend, Volkswagen issued a stop-sale for cars equipped with their 2-liter diesel engine after admitting the those cars cheated to pass emissions test. According to Automotive News, a Sept. 21 letter from Volkswagen to its dealers offered $300 bonus cash for every new car sold and $600 for every Passat sold. (The Passat is the already second-best deal in America right now, according to Kelley Blue Book.)

In addition to the bonus cash, dealers will also receive a bonus totaling 1 percent of sticker from each new vehicle sold in the third and fourth quarters.

“In light of recent events, we are committed to taking actions which will stabilize your profitability in the near-term,” Volkswagen U.S. chief Michael Horn said in the memo, according to Automotive News. “We understand the pressure these recent events have put your business under and we are committed to providing you support.”

TDI sales in the U.S. comprised 23 percent of Volkswagen’s sales in August and accounted for 21.6 percent of total sales in 2014, according to the automaker.

Shares of Volkswagen are currently free-falling from their 5-day high. In two days, the stock has shed nearly 38 percent of its value, on top of 30-percent losses from slumping sales already.

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56 Comments on “Volkswagen Will Offer More Cash to Dealers as It Skids Completely Out of Control...”


  • avatar
    GermanReliabilityMyth

    So, this is their final solution? What a gas.

  • avatar
    sirwired

    It’s going to take a lot more than $300-$600 + 1% cash on the hood to take care of this mess.

    I’m totally going to be looking for a killer deal on a ’16 Golf wagon soon… VW’s are gonna be toxic for months.

  • avatar
    Demetri

    Keep putting money on the hood and I might have to go test a Golf back-to-back with the Mazda3. I was at least going to wait until the new Civic coupe is out and do a 3-car comparo, but deep discounts can persuade me otherwise.

    • 0 avatar
      mazdaman007

      I love my Mazdas but I could be persuaded into a GTI with a free 7 year bumper to bumper warranty.

    • 0 avatar
      lon888

      Do you really think the dealers will pass this money onto the buyers? H3ll no! VW dealers will continue with ADM on Golfs and GTI’s. VW dealers are the biggest pricks in the world. This coming from a 2012 GTI owner – I bought mine via the internet so my interactions would be minimum.

  • avatar

    Bugatti Veyron Super Sport fire sale. Count me in.

  • avatar
    agent534

    Time to buy some VW stock? They set aside $7billion to take care of the mess, but just got $3.8billion from Suzuki, so this mess looks to cost them $3.2billion or just one quarter’s profits.
    Sounds like minimal impact from all this.
    Anyone who knows more better than me out there?

    • 0 avatar
      Astigmatism

      No way of knowing today, but two points of caution:

      – Just ‘cuz they set this aside doesn’t mean that it will be the sum total of their cost: recall that the EPA could theoretically fine them $18 billion. They won’t, of course, but that’s only one regulator in one country, covering less than 500,000 out of 11 million cars that apparently shared this trait. Add in possible consumer lawsuits and there is literally no way to know how much this will end up costing them.

      – Even if the $7 billion they set aside ends up covering all of the direct costs, their image is likely to take a hit from this for a long, long time. Part of any stock price is a projection of future sales growth, and they could be stinging from this for a while.

    • 0 avatar
      BlueEr03

      The stock is going to continue to slide as more news comes out. If the V6 TDI needs to be recalled, expect another hit. There will also be a big move (up or down) depending on what the punishment is. If it is less than expected, the price will shoot up on the “good” news, but will then drop after as people sell to realize their gains.

      Now if you want to hold for a few years, go ahead. But I wouldn’t touch it until after the announcement of the punishment.

      • 0 avatar
        jkross22

        Is the V6 TDI the same engine as the diesel in the Cayenne?

        • 0 avatar
          jpolicke

          Yes. With a scam as big as this one, I suspect that eventually everything VW makes is going to have its emissions performance audited. How do we know that the test-detection program isn’t built into the whole product line?

          • 0 avatar
            blppt

            If memory serves, the V6 TDI uses Urea, and from what I’ve read, the whole issue is that VW tried to pass the non-urea using 2.0 TDI past the EPA with its ECU trick.

            I would tend to doubt the V6s needed any cheating, or no more so than any other light-duty diesel on the market.

            Also, you could probably bet VW would have made a pre-emptive strike on the V6s if they had this software cheating.

          • 0 avatar
            mazdaman007

            @blppt
            The 2.0 TDi with SCR (urea/DEF) are also affected. It seems they may have just elected to use less urea in normal operation to extend the period between refills, and also to reduce the hit on HP/torque/fuel economy.

            I tend to agree on the V6, if it was also affected why wouldn’t they have come out with it when they announced the 11 million figure ? I mean at this point for VW, does it really matter if it’s 11 million, 13 million or 15 million ? Would also go against their statements about cooperating fully with the authorities. (And yes, I am fully aware of the incongruity of the preceding sentence :)

    • 0 avatar
      sirwired

      Firstly, the amount they’ve set aside explicitly does not include any potential fines. They haven’t even begun to estimate this yet. I’m thinking the EPA will hit ’em for at least $1B because the conduct was both widespread and so intentional. (As in, they won’t be able to claim somebody misinterpreted the rules here, or that it was just one lone engineer in a cube or test facility up to no good.)

      Second, your math makes no sense. The Suzuki money has nothing whatsoever to do with the recall. The recall costs what it costs. If the Suzuki money wasn’t spent on the recall, VW could find some better things to do with the money; spending it on fines and repairs instead will totally have an impact.

    • 0 avatar
      APaGttH

      With 11 million impacted vehicles around the world, $7 billion is chump change.

      Toyota’s problem were global but incredibly simple to fix, remove/replace floor mats and carve up gas pedals to introduce additional clearance between the base of the pedal and the floorboards of the car/SUV.

      GMs problems IIRC largely in North America.

      Honda and Toyota problem (the Corolla/Matrix/Vibe has the highest failure rate for Takata airbags) is Takata’s problem, and Takata is fighting to keep themselves from having to eat so much as to go insolvent.

      VW is a global scandal – sure in some countries they are in their presence is small and total potential fines are small (South Korea can zing them for about 3.5 mil US equivalent) in other countries they have a tendency to execute executives (literally) caught lying and cheating (not that I see China taking local VW execs to the firing squad).

      Really hard to gauge where this will land and how much it will cost – but I’m guessing $7 billion is no where near enough. If the US cuts the EPA fine by 90%, the fine alone (no repairs, no engineering costs, no class action law suits, no diminished value, no buybacks, no criminal action) just the fine would be $1.8 billion.

      • 0 avatar
        manny_c44

        The Toyota problems were due to ECU “spaghetti code”– there is no German car out AFAIK that will actively cause an accident. A reliability engineer I spoke to said it was grossly negligent coding practices that led to the Toyota deaths, not carpet. I will never own a Toyota product.

    • 0 avatar
      jthorner

      No way $7B is going to be enough to deal with this scandal. The real number is probably at least ten times that much once all the other countries and customer impacts are accounted for. In fact, $70B might not be enough. At some point the German government is going to step in to protect jobs and German’s image as an Engineering Super Power.

  • avatar
    eggsalad

    Show me a 36-month lease on a stickshift Golf for $999 down and $99/month, and I’ll be there.

    Sure, leasing a car is for suckers, but owning a VW past the warranty is likewise for suckers.

    Oh wait. The VW dealers in Las Vegas don’t actually sell cars with stickshifts, except maybe a GTI or R32.

    • 0 avatar
      brettc

      For the 2016 gas Jetta, the manual option is pretty much gone even in the formerly cheapo Jetta S. The only model I could find it available on was the 1.8T Sport. But at least they’re still offering it in the TDIs. Oh wait…

  • avatar
    cartunez

    Frag the dealers. Offer the consumer 7 yr or 120K mile bumper to bumper warranty with 4 yr 50K free maintenance. VW is going to allow a great crisis to go to waste just like the clowns at GM. They will sell like hotcakes.

  • avatar
    PeriSoft

    “We understand the pressure these recent events have put your business under and we are committed to providing you support. Oh, shit. Oh shit, oh shit, shit fucking shit. God damnit. Oh, fucking hell. Fuck.”

  • avatar
    TrenchFoot

    Anyone know if VW is allowing dealers to sell used or CPO 2009+ TDI models?

    • 0 avatar
      sirwired

      They are not.

    • 0 avatar
      SCE to AUX

      I think all TDIs in VW dealer possession are on stop sale, including used cars.

      Think of this: What about used TDIs sitting on the lots of OTHER mfrs, or local used car lots? They’re all radioactive.

      Cars.com is showing 5337 used VW TDIs in the US, covering 2009-2016. All turds now.

      • 0 avatar
        TrenchFoot

        Just dug around and there’s a local dealer with a few used TDIs for sale, even a 2014. But they may just need to update their inventory.

      • 0 avatar
        28-Cars-Later

        Turds for the time being, once everything is straightened out their value should return.

      • 0 avatar
        APaGttH

        Turds?

        To early to say. Toxic assets on the books – yes. I’ve seen conflicting information saying that you cannot register/renew registration on the impacted vehicles (which would mean sure you could buy one, but then if you can’t put plates on it) and I’ve read the EPA was going to allow registration to continue while a fix was worked out. However, continued registration may apply only to vehicles already on the road (e.g. if your plates expire in October, what the Hell do you do if you can’t renew, can’t sell, and still paying VW).

        It’s a mess, that is for sure.

  • avatar
    Kendahl

    Time to get a spectacular deal on a new, gas-powered Audi or VW. Shades of the Audi 5000 unintended acceleration fiasco long ago except that this time it’s a legitimate issue.

  • avatar
    Chopsui

    What about Audis?

  • avatar
    dantes_inferno

    With the Top three automakers in the world (GM, Toyota, VW) vying for the title of #1, expect a lot more short-cutting shenanigans – and a better effort to conceal the deception. Greed and human nature knows no bounds.

    Which is precisely why I haven’t purchased a new vehicle in over 12 years – that and the fact that the complexity (as well as cost-cutting) of vehicles keep increasing year after year. I’m taking the restomod route for my existing vehicles – there’s beauty in simplicity.

  • avatar
    jrasero23

    While TDI engines make 25% of USA sales I see this more of a International problem especially in places like Europe. Many of my business contacts drive some kind of high end diesel Audi. Overall I see why people are upset and why the stock has plummeted but honestly who cares? You are stupid to begin with to believe there was such thing as clean diesel, that’s like saying there is clean coal.

    The Verge just wrote an article on how this will push VW’s hand greatly into electric and hybrid cars. While I think the future is electric, I think most manufactures are a decade(s) behind. Yes there is the Leaf/Volt/Tesla/BMW and even now Audi in the electric game but there are some severe limitations, one being price. Even with tax incentives and rebates an electric car in most cases is still expensive, range is getting better but not good enough for people who drive a lot, electric charging stations are also getting better but not implemented well enough to eliminate millage fear, form and function wise besides maybe Tesla electric cars don’t stack up with conventional cars.

    Overall ever car company goes through it. Do what GM is doing and ignoring the problem with ignition switches and just throwing money to hush people.


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