As we discussed in Further thoughts on the emissions Scandal, the VW fraud is of epic proportions and will have compounded costs over at least several quarters for the company and Germany’s (therefore Europe’s) leading sector. See, New VW CEO: brace for ‘massive cutbacks’. Germany has been the critical engine for a moribund Europe over the past decade, and the growth trajectory of both was weak before this story broke.
The company now has the need to not only recall and redesign its cars, but also to repent, reform and massively rehabilitate its public image. The people buying VW products believed that they were making fuel-efficient, lower pollution choices. The attraction was a feel-better-brand with state of the art technology. People trusted VW. The breach of that trust makes this fraud particularly incensing to the millions who were duped. It also means that it will take a seismic shift for the company to reform itself.
There is enormous opportunity here. For VW to make amends for the pollution that it lied about and rebuild as an authentic brand, it should leapfrog slow-moving competitors and double down on zero emission vehicles now. German engineering with affordable, electric engines is the perfect opportunity for VW to become trustworthy once more. See: More reasons to embrace electric cars and Even more reasons to embrace electric cars (as if we needed more). Lead and the people will come (back).
Steve Kalafer is furious. After 23 years selling Volkswagens at his dealership, Kalafer reckons he has never seen anything as bad as the German automaker’s rigging of the emissions levels on its clean diesel vehicles.
“This fraud makes Madoff look like the minor leagues,” Kalafer said from his dealership in Flemington, New Jersey. “It is the biggest fraud I have ever seen in all of business. Over $300 billion of these products have been sold in Europe, $15 billion [in]the United States. That dwarfs Ponzi and Madoff combined.” Here is a direct video link.