How was your 2015? Can’t be any worse than Volkswagen’s. The company has lost more than 1/3 of its market value in the wake of one of the biggest corporate business scandals (to date) the 21st century.
In case you have been living under a rock (or a Beetle), here’s the short version, as explained by BBC News:
“In September, the Environmental Protection Agency (EPA) found that many VW cars being sold in America had a “defeat device” – or software – in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. The German car giant has since admitted cheating emissions tests in the US.
VW has had a major push to sell diesel cars in the US, backed by a huge marketing campaign trumpeting its cars’ low emissions. The EPA’s findings cover 482,000 cars in the US only, including the VW-manufactured Audi A3, and the VW models Jetta, Beetle, Golf and Passat. But VW has admitted that about 11 million cars worldwide, including eight million in Europe, are fitted with the so-called “defeat device”.
The company has also been accused by the EPA of modifying software on the 3 litre diesel engines fitted to some Porsche and Audi as well as VW models. VW has denied the claims, which affect at least 10,000 vehicles
In November, VW said it had found “irregularities” in tests to measure carbon dioxide emissions levels that could affect about 800,000 cars in Europe – including petrol vehicles. However, in December it said that following investigations, it had established that this only affected about 36,000 of the cars it produces each year.”
Basically, the company not only cheated on its exams, but also cheated on its exams 11 million times, resulting in a lost generation of kosher cars for the legendary company. Volkswagen has made desperate strides to recover and refresh its image, including (presumably) pressuring its boss into resignation.
VW’s most recent effort is to address the core elements of its brand position, including its tagline. For years, the company has featured its iconic logo with “Das Auto” written underneath, which translates to “The Car”.
The “Das Auto” slogan isn’t exactly inventive; it’s something a CEO would list in his or her five-year vision for where the brand is going to be. However, it doesn’t define a feature or benefit of the product. Rather, it simply proclaims itself alone in one of the world’s most well-defined and competitive industry. Started by Ford and dominated today by the Toyota-Honda-Hyundai triumvirate, the auto industry is hardly shaking in its boots at the sight of VW.
Furthermore, a “car” is what the product actually is. It’s obvious to consumers at this point what the car’s most general category is (it’s a car!). The slogan does less to declare itself superior and more to seemingly whine about how it is still relevant (“We’re a car! We drive! Buy us!”).
To VW’s credit- what little they can be granted at the moment- they seem to agree and have blamed the old, ousted head honcho for the slogan, according to one manager:
“According to a manager who was there, Volkswagen brand chief Herbert Diess described the Winterkorn-era slogan – which could suggest that VW alone can define the modern motor car – as absolutist.
Such an image of regal arrogance ill fits the reality of VW today: a company facing huge costs from recalling and modifying cars to meet emissions regulations, plus likely regulatory fines and a welter of lawsuits.
Volkswagen needed to show humility, the manager said, and the slogan ‘Das Auto’ was pretentious. The old slogan also failed to convey VW’s technological ambitions in areas such as electrically-powered vehicles, the manager said, requesting anonymity.”
But as bad as “Das Auto” is, VW is now moving toward an even simpler and less effective tagline: the name of the company. VW will present its logo- a logo that has the initials of the company- with “Volkswagen” written underneath it. Talk about redundant! The new approach hogs the entirety of the space normally reserved for brand positioning and fills it with what is essentially the same information. Twice!
This is shameful in several respects. First, you can’t brand your way out of a scandal; Firestone learned that the hard way. You’re paying for your own marketing, and consumers are smarter than people give them credit for.
But more to the point, the actual brand decision made here is a major mistake. With the abundance of interesting elements of the VW brand- cool shapes and colors of vehicles, good MPG, innovation safety- there were any number of concepts that could have served as an overriding tagline. Instead, the space next to the logo repeats what consumers already know. It’s almost as if the executives in the boardroom determined that a boring look would result in less news at a time when the company could use a break in the news cycle. If that’s the thinking in it works, we can all throw out the PR and brand positioning playbook. More than likely, it will flop and the press will bat VW around in the public eye for an even longer period of time. At best, the impact will be nonexistent.
To be fair, now is not the time for an earth-moving slogan. But if that’s how it’s going to be, then don’t announce a slogan change. Don’t discuss the brand first. Just talk about how to keep your product from violating the law and focus on repaying those who are about to launch a massive, crippling class action lawsuit against you.
Moral of the story? Bad PR can devastate you, but bad brand marketing doesn’t help.
Do you agree? Disagree? What would you do in VW’s position? Let me know in the comments, especially if you have a different perspective. I love those.