WASHINGTON -- Volkswagen of America’s $1,000 gift card offer for 2.0-liter diesel owners was met with a mixed reaction last week.
Some owners took to social media to vent about what they believed to be a lowball offer given the depreciation sustained by their cars since the scandal erupted two months ago.
Others, including members of the TDIClub.com owners’ forum, were more measured, with some saying they’d take the cash even though they planned to avoid getting the fix Volkswagen is still working on for fear that it will degrade performance or fuel economy.
In its first significant marketing response to diesel emissions violations, Volkswagen of America on Sunday began running ads in major U.S. newspapers declaring that "we're working to make things right," while plugging the customer goodwill program.
In the ad, VW Group of America CEO Michael Horn states that "over the past several weeks, we've apologized to you, our loyal customers, about the 2.0L VW diesel emissions issue. As we work tirelessly to develop a remedy, we ask for your continued patience."
The ads will run in more than 30 newspapers, including USA Today, The New York Times, The Washington Post, Chicago Tribune and Los Angeles Times. Digital banner ads are also planned.
The campaign was created by VW's U.S. ad agency, Deutsch, L.A.
VWoA has been under pressure to offer those owners some type of relief or information. It called the aid package a “first step toward regaining our customers’ trust.” But with an onslaught of consumer litigation and government investigations pending and a fix still up in the air, it’s hamstrung in terms of what it can say to customers or do for them.
Meanwhile, VW’s headquarters in Germany has been mum in recent weeks about how and when it will remedy the noncompliant diesel vehicles, a communications void that has pummeled resale values and annoyed owners.
“I’ve seen situations like this before,” said Matt Friedman, a crisis communications expert at the Detroit-area firm Tanner Friedman.
Friedman says programs like the one VW launched last week are often hashed over by so many corporate departments — legal, finance, marketing and so on — that by the time they’re done, they “barely resemble the original concept that someone with very good intentions developed.”
Not that any of that matters to customers.
“The Twitter audience doesn’t understand any of that, or care,” Friedman said. “They paid more money for a product that they ultimately didn’t get. So they have to decide if they’re going to live with it, sue or sell their car even at a loss.”
TDI owners who try to sell now will almost assuredly take a bath as VW diesel values continued to fall this month. For example, Jetta diesels at auction were worth $11,139 on average, a decline of 18.5 percent, or more than $2,500, from pre-crisis levels in early September, according to Black Book. Kelley Blue Book sees similar declines, with the average auction value of VW diesels dropping nearly $2,100 through Nov. 6.
Dealers, on the other hand, applauded the program because customers must come into the dealership to activate the two $500 gift cards — one for dealership credit and another to be spent anywhere Visa cards are accepted.
“There’s a lot of uncertainty. We don’t have the prescribed fix,” said Marc White, vice president of Steve White VW-Audi in Greenville, S.C. “That’s why I’m excited about the goodwill initiative, because the customer can come in and we can talk about this.”
E.J. Schultz of Advertising Age contributed to this report.