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Can VW fix its damaged brand?

Posted on by St John

Can VW fix its damaged brand?

St John White, head of Prova’s automotive team, considers the impact of Volkswagen’s recent PR crisis…

Nobody likes a liar. And it’s even worse when that liar has been such a good friend over the years. It’s such a shock, a betrayal, when you find out that a long-trusted friend or partner turns out not to be the person you thought they were. That’s how I feel in the wake of the crisis that has engulfed Volkswagen, the German car maker.

Following revelations that as many as 11 million cars worldwide have been fitted with software to fool emissions testers, the once trusted brand is now facing unprecedented challenges. A drop in share price of around 35%, questions from its investors and most importantly a dent in the firm’s reputation have been the immediate fall-outs from the revelations of ‘emissions fixing’. Furthermore, a drop in car sales as well as swingeing fines and lawsuits are bound to follow. This is clearly a story that won’t go away quickly for Volkswagen.

While Mike Hawes, head of the UK’s SMMT has commented in the UK media that there is no evidence that this problem is endemic; it’s hard to believe that the temptation to tweak the software to massage emissions results is not more widespread. Initially, the problem has been found in the US, but its discovery among manufacturers Europe is surely a matter of ‘when’, not ‘if’.

So, what’s the future for Volkswagen and what does this scandal mean for the motor industry? Clearly, senior management at Volkswagen need to take counsel from their respected PR team and act swiftly and decisively. Heads may need to roll and clear action taken to lance this reputational boil. This is where PR professionals really earn their keep, by making it clear that grown-up reputation management is not about drafting glib statements to placate the media; it’s really about recommending tough, often unpalatable actions to regain trust.

Looking further afield, the crisis will prompt a far wider discussion about emissions testing, which itself is probably in need of a major overhaul. Industry insiders have known for a long time that claimed tailpipe performance figures are frankly unreliable and the VW debacle proves it. While carmakers will need to put their houses in good order regarding trust in the next few months, testing authorities also have a responsibility to ensure they’re not sanctioning data that simply does not stack up.

In the final analysis, this sorry tale takes us back to the oldest PR adage in the book; reputations take a lifetime to build and a moment to lose. Even if they won’t admit it publicly, executives at Wolfsburg will be contemplating this phrase right now.

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