It is expected that Volkswagen is offering cash to the owner of diesel Volkswagen cars in the United States soon. The are doing such extreme moves because they are trying to recover their brand after the huge fiasco in September. This upcoming Monday, Volkswagen maybe be offering diesel owner up to $1,250 if they spend at a Volkswagen dealer and if not they would get $500 cash card. Volkswagen is still facing many lawsuits. In response to the lawsuits Volkswagen has promised to make changes to the cars that were cheating on the emissions testing. The specific cars that have been affected was the Golf, Jetta, Beetle, and Passat molds solid since the 2009 model year. Volkswagen has been trying to minimize the damage to sales by offering cash incentive to exist owner if they have bought or lease a new car, as well as big discount for all buys.
http://www.nytimes.com/2015/11/08/business/international/volkswagen-may-offer-cash-to-ease-owners-ire.html?hp&action=click&pgtype=Homepage&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
9 comments:
I don't know how effective this would be. There are plenty of other car dealerships that offer cash or something of monetary value if you just test drive a vehicle. It seems like VW is doing too little, too late to try to improve its extremely damaged reputation.
This is a very interesting strategy for Volkswagen but it will probably fail. With more than half a million cars involved in this issue, I believe a total recall and compensation for the devalued car, as previous stated by the New York Times. If they're offering this monetary compensation and not a total recall, consumers are stuck with a devalued asset, unable to sell it to break even on their investment, forced to continue using it until its useful life runs out. I wonder what Volkswagen is trying to do with this compensation.
I agree with Emily and Maggie. A $500 gift card is not going to smooth over relations with customers. They lied to them and many of these environmentally friendly enthusiasts are not going to want to buy volkswagens ever again. Maggie makes a good point about how all of these customers who have been screwed over are stuck with these devalued cars and a $500 gift card is not going to help with this issue. I do not think this strategy will work for Volkswagen.
I was unaware that these emissions issues had been in existence since 2009, that is quite some time. In regards to the cash incentives I think this is a bad idea. I agree with what was said before, which is that there is no way a small cash incentive is going to smooth over relations between VW and its customers. Similarly, being that they have had recalls and are facing many lawsuits, giving away cash just isn't an option for them. They are strapped financially, and should find other ways to keep the company afloat rather than just paying people off.
Trying to buy out customers after making such a huge mistake will not do enough to make up for what their going to lose as far as their reputation goes.
I also think that this strategy will probably fail. A lot of VW-loyal customers have started backing out from continuing to use VW cars due to this huge scandal, and new customers are now more aware about what is going on in the market, and so have stayed away from purchasing VW products. Although trying to incentivize customers from buying VW cars is a good move, however I feel their strategy now is just too little, too late.
Trust is the thing which cannot easily buy back by money. Trust is built by the long term behaviors. So I think VW may need more time to earn the trust back. However, VW also needs a plan to survive until earning the loyalty back.
Although this seems like a pretty ineffective method, I think it will buy back some VW user trust. People can be easily persuaded and when handed cash, it can do a lot more than you think. In the end however VW will need to keep moving forward in an attempt to try and gain back their customers' trust and rebuild their reputation.
I'm curious as to what the best approach would be if not offering money to those who have bought the care models, even a small sum. I hope they're tacking on a big "I'm sorry" note with those gift cards.
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