Saturday, 29 April 2017

Is VW's Desire To Compensate Cynical?

VW is refusing to compensate European customers the way it is for the US and Canada. They say the compensation is for the North American region only. Someone at VW needs to do their homework. A newsreader in New Zealand who's husband bought a Škoda said they got a letter saying they would be getting compensation, larger than the US amount but consistent with exchange rate differences. Mind you VW brands are a not big sellers in NZ so they will not want to tarnish their modest reputation. I suppose the same applies to North America.

 In Europe there are many more customers that have been cheated. VW also know they have a docile and compliant customer base there. VW Group can do what they like in Europe and the high regard the various brands within the group are held means they won't leave just because they were cheated. VW would presumably say that isn't the case. So what reasons have they given for the different way of handling the situation?

US customers bought a vehicle specifically advertised as a "clean diesel", which of course they didn't get. They were also being enticed to buy a type of propulsion US customers don't normally consider, whereas in Europe diesels are very popular. North American customers pay more to run a diesel car but in Europe buyers receive tax benefits and - depending on the country - can pay less for diesel fuel than petrol. VW is of the opinion that European customers will be less inconvenienced by the cheating because plans for a recall are more advanced than in North America.

Personally I don't buy the spin VW are trying to put on this. It simply comes down to numbers involved and what they feel they need to do to pacify affected customers with a minimum of cost. Of course European VW owners are not being cut adrift, but in the end they will be less compensated by VW Group for the same problem. If that is fair to you, all well and good. If like me you believe the same problem should have the same response, then we would call it cynical. This leads me to question how sincere they are about the whole thing. Is VW simply upset at being caught, or treating the loyalty of their customers with anything but?

I always said it's not about the level of offending that counts, it's about the degree of contrition and desire to put things right as best they can. While European car ownership has differences to North America, the compensation variance is more than it should be. It seems cynical to me, but I may be wrong. It could be I expect too much from business.

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