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Damage From Volkswagen Dieselgate Continues To Spread

(Credit: Volkswagen)

Car Recalls

Damage From Volkswagen Dieselgate Continues To Spread

2013 Volkswagen Beetle TDI badge

2013 Volkswagen Beetle TDI badge (Credit: Volkswagen)

It’s another week and the damage from Volkswagen’s Dieselgate is continuing to spread like smoke from a wildfire. Many TDI owners are less-than-enthused about the news that VW is giving them all a $500 prepaid Visa gift card, which some are jokingly calling a bribe from the automaker.

On top of that, the company is also sending out $500 gift cards that can only be used at VW dealerships, because TDI owners will have plenty of time to buy model TDI cars, hats and official Volkswagen coolant while their vehicle is finally getting “fixed” so it stops spewing out too much pollution.

The final offer for all TDI owners is three years of free roadside assistance, which will come in handy if the “fix” for the vehicles creates any unforeseen problems that would otherwise leave people stranded.

Needless to say, this three-prong maneuver to smooth things over with TDI owners isn’t going over too well, because it’s like slapping a band aid over a severed carotid artery. But with about half a million vehicles affected by the recall so far, these gestures are costing the automaker at least $500 million.

Making the whole gesture even richer, Jalopnik reports that the Touareg TDI isn’t part of this offer for some unknown reason. Will this be the kind gesture of goodwill that will keep TDI owners from fleeing the VW brand?

Autolist.com just performed an in-depth statistical analysis on the effects of Dieselgate on dealers and vehicle prices. While some have been saying everything’s fine on that front, Autolist’s numbers say otherwise. The average VW sits on dealer lots 123 days, which is 44% over the industry average. As a result, Autolist found that dealerships are dropping prices by an average of 4.7%.

While that doesn’t sound good, Autolist says that things are about to get even worse. Depreciation of VW vehicles is actually accelerating, affecting all models and not just TDIs. This is bad news for Volkswagen, its dealer network and owners.

Finally, Bob Lutz says that the whole Dieselgate scandal was a result of poor leadership from the former head of the Volkswagen Group, Ferdinand Piech. Under his direction, VW pursued “clean” diesel powertrains as the way to meet tightening government fuel economy standards, a pathway that obviously hurled the company toward doom.

Lutz said that Volkswagen’s headaches are only beginning, saying that Dieselgate is “the disaster that keeps on giving.”

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