Volkswagen or Voltswagen? You choose

Last week has been pretty busy time at Volkswagen (VW). Last Monday, the media was abuzz with reports that Volkswagen planned to change its brand name in the United States to Voltswagen as it shifts its production increasingly toward electric vehicles, and tries to distance itself from an emissions cheating scandal that wrecked its reputation in 2015. The company had supposedly briefly posted a press release on its website early Monday announcing the brand name change. The press release was noticed by a reporter from USA Today before it was removed.

 

The premature release became public as VW was starting to take bookings for its new ID.4 small electric SUV in the United States —the only new electric model to be sold by VW in the American market. The media leak went on to elaborate that even with the ID.4 fully on sale, only a small fraction of VWs on US roads would bear the “Voltswagen” name. The vast majority of VW's vehicle sales in the US would still be powered by gasoline for the foreseeable future and would continue to be labelled simply as “VW”, as before. The German automaker sold just under 326,000 VW-branded vehicles in the US last year.

 

A statement posted to Volkswagen’s US website on Tuesday, which said: “We might be changing out our K for a T, but what we aren’t changing is this brand’s commitment to making best-in-class vehicles” was later circulated to the press. So there was no reason for anyone to believe that the European car maker had any intentions other than signalling greater reinforcement of resources to green cars of the future.

 

But later the same evening, on Tuesday, a company spokesperson announced to everyone’s surprise that the statement had been a pre-April Fool’s Day joke, after having insisted on Monday that the release was legitimate and the name change was accurate.

 

Volkswagen’s intentional “fake” news release, highly unusual for a major public company, has left most auto experts puzzled, if not perplexed. VW has been making concerted efforts to repair its public image as it has tried to recover from a 2015 scandal in which it cheated on government emissions tests and allowed diesel-powered vehicles to illegally pollute the air. In that scandal, Volkswagen admitted that about 11 million diesel vehicles worldwide were fitted with deceptive software, which reduced nitrogen oxide emissions when the cars were placed on a test machine but allowed higher emissions and improved engine performance during normal driving. The scandal cost Volkswagen $35 billion (^30 billion) in fines and civil settlements, and led to the recall of millions of vehicles.

 

The company’s fake news release, leaked on Monday and repeated in a mass email to reporters on Tuesday, resulted in articles about the name change in multiple media outlets worldwide, including the Associated Press (AP).

 

The VW joke, for whatever it was worth, still does not detract from the growing importance of electric vehicles (EV) in the world of tomorrow. In the US, fully electric vehicles last year accounted for less than 2 per cent of new vehicle sales. Tesla led the way, with an estimated 205,600 in US sales, according to Autodata Corp. General Motors sold just under 21,000 Chevrolet Bolts, while Nissan sold a little more than 9,500 Leaf electric cars. Outside the US, in fact, Volkswagen, like some other automakers, has sharply expanded its EV footprint. In Europe, the company tripled its battery-powered vehicle sales from 45,000 in 2019 to 134,000 in 2020. So “Voltswagen” is not quite as outlandish a joke as it now sounds after the media flip-flop earlier in the week.

 

So what did VW gain from all this? Well, to start with, unprecedented PR-mileage. First, on Monday, when the “leak” was initially scooped up by AP and circulated. Second time, when a confirmation was officially provided on Tuesday morning to the media, and carried again globally. And then the third time when the denial was issued by VW. So, millions and millions of dollars of media coverage in 36 hours flat! Worth it? Debatable.

 

Did the entire ruse hurt the Volkswagen brand name? A decade ago, I would readily have said “yes”. Today, I am not so sure. “Clever” said many industry watchers. “Funny” said some. From “innovative” and “inventive” to “inane” and “idiotic” — the prank had both supporters, and detractors.

 

Was it worth the risk? Well, for a comparatively smaller, if not marginal, player in the US market, Volkswagen got the kind of attention and mind space even a paid media launch of a major model may not have ever got. So, it was well worth the risk… a story so real that the deception itself was difficult to negate. C’mon, naming the electric vehicle range as Voltswagen was not really outside the realm of reality. What if, seriously, next week in another PR twist VW denies it was ever a deception? />

 



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