Look back of the last few years in Volkswagen history and you see a car company that could be called an up and comer and the envy of many competitors. The brand was innovating, leading the pack and changing the way other makes handled their business.
As it continued to grow, VW managed to maintain both its classic mystique built on the fame of the bug and the van, as well as its growing rep as the go-to car of today in just about every category from economy to luxury. Eventually, VW became the world’s largest automaker.
Just when things were starting to look incredible for Volkswagen, the bottom fell out. The emissions tampering scandal turned the darling of the international auto world into a laughingstock and a pariah. Consumers were stunned, then angry. Watchdog groups and both national and international agencies came down with both feet…and they came down hard.
First, VW was defiant, but that didn’t last too long. Bowing to insurmountable PR pressure, Volkswagen ousted its CEO and replaced him with someone they felt may calm the storm.
But if you thought they could make it out of this mess that easy, I have a bridge to sell you. Consumers were not mollified, nor were industry opinion makers. Sure, they liked the step, but it was only one step…and folks were out for blood. Sales continued to fall as consumer interest went to a dead stick. No motion…then less. VW PR was going backwards.
In an effort to stabilize and stop the bleeding, VW recently announced it would cut spending on new projects. Suddenly, the company of innovation was the company of status quo. Projects on the chopping block? Many of the things that made the company cool again, including the Phaeton luxury car and a modernization effort for the company’s Mexican plants. Sure, VW will still invest in innovation, but they are investing more than ONE BILLION LESS than originally planned. That’s not just a belt tightening. That’s going down a size or three.
Industry wonks are wondering if this is the other shoe. Is there more bad news coming for VW, or will they make it out with just a few slight measures.
Whatever your take on that question, one thing is very clear, you can’t get your consumer PR buzz back if you abandon the stuff that made them love you in the first place.
VW must find a way to become profitable … and cool … again.