PR professionals say that coming clean is the only way VW might be able to save itself
Automotive giant Volkswagen has seen millions of dollars wiped off its brand value since it emerged that it had faked emissions tests in the US. Mumbrella’s Miranda Ward asked public relations professionals how the company should move forward in its attempts to try to save its brand.
PR professionals are agreed on one thing – Volkswagen, once synonymous with quality amongst consumers, is facing the biggest crisis in its history thanks to its emissions scandal. But what they don’t agree about is how to save the brand.
The scandal, which revealed that the car giant had installed devices in diesel engines that could detect when they were being tested for emissions output, changing the performance accordingly to improve results, has seen Volkswagen recall almost 500,000 cars in the US alone, with the situation being monitored in Australia with the the Australian Competition and Consumer Commission beginning its own investigation.
Today’s AFR is an example of how the crisis is affecting consumer sentiment in Australia
The conspiracy has already begun to impact on VW’s reputation in Australia, with news outlets reporting declining sentiment amongst existing customers.
VW America boss Michael Horn has admitted the company “totally screwed up” and CEO Martin Winterkorn has resigned over the incident.
Franscesca Boase, GM of PR agency Sefiani told Mumbrella: “What is apparent is the scale and depth of deception runs deep, and its impact on public trust of the brand is catastrophic”.
InsideOut Public Relations director Nicole Reany agreed: “Consumers, regulators, supplies will start to question all quality and brand claims.
“At this stage while Australia is monitoring the situation, brand perceptions have been affected worldwide.”
For VW locally this isn’t the first recall problem, with the car giant recalling a series of cars which had power-loss problems after a series of reports were published by Fairfax in 2013. The recall also saw the company pull much of its advertising from across Fairfax Media because it was unhappy with the coverage.
For Boase, while VW “has got some basic communications right, there is room for much improvement”.
“The company issued statements acknowledging the problem; apologising for the error and pledging a relentless search for ‘the truth’,” she said.
“However, there still seems to be widespread denial of knowledge of the issue internally and ongoing references to external investigations – rather than internal investigations to interrogate the systemic issues that allowed this to happen in the first place.
“One of the fundamentals of crisis management is that ignorance is no defence, and the apparent ignorance within the highest levels of Volkswagen’s executive team does not instil confidence.
“Statements from Volkswagen refer to ‘making a fresh start’ both in the CEO’s resignation speech and statement of the Board, but these statements seem premature and a little naive as investigations have just begun.”
Jaques
However, Tony Jaques, owner and director of strategic consulting company Issues Outcomes, believes “it’s too soon to evaluate VW’s performance as the crisis is still emerging”.
“VW have done the basics – an apology, an explanation and sacking some individuals – but that is very clearly not enough. Nor is the resignation and denials from the CEO,” he said.
“The danger is that it’s seen as some sort of branding exercise, whereas it’s really a crisis about fundamental values inside the company. From what we know so far, my guess is that the brand will survive, but the company need to demonstrate they recognise it’s about a lot more than just communicating well.”
Volkswagen handles all its public relations and communications in-house. The company declined to comment on its communications strategy.
Reaney
In Australia, InsideOut’s Reany says the brand “should be much more proactive in containing and managing this situation”.
“There is an entire suit of communication channels it’s not utilising,” she said.
“Right now, its social media channels are forging ahead as normal, and the public are hijacking its posts with comments and links to media articles.
“To maintain some control of its messaging, the brand needs to address the situation and continually provide updates. It can’t hide now.”
Boase’s advice for Volkswagen was “to a take a far more proactive and impartial approach to these investigations by appointing an investigative team with impeccable integrity and a reputation for ethical conduct”.
“Recent events have been truly catastrophic for the brand on a global scale,” Boase said.
Boase
“The best Volkswagen can do is to remain as transparent as possible as investigations into years of systemic deception to customers, staff and stakeholders are conducted.
“Only by taking an open approach will the brand have any chance of restoring its reputation.”
Reany believes there is a chance for the brand to save some face locally if it is honest.
“Australia wants to understand, and believe, the level of impact here, what is being done on an international level to resolve the situation and some honesty around who knew what and ensuring they are rightly reprimanded or removed from the organisation,” she said.
“If the organisation handles the situation which some integrity, Australians are likely to soften their responses.”
- Miranda Ward is the public relations and publishing editor for Mumbrella
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
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It’s definitely a huge cock up that has heavily impacted their corporate reputation and brand equity, but it’ll be interesting to see how Dieselgate ultimately impacts their vehicle sales volume and bottom line. VW cars continue to be compelling propositions in many of the categories that they sit in and they have a bunch of new models launching this year and next. Definitely will be one to keep an eye on and also one for the corporate reputation/PR textbooks in the future.
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Wow, a bunch of highly paid hacks saying the very same thing, but in way too many words:
F*ck up.
Front up.
Fess Up.
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Just goes to show that some of the best advertising in the world counts for nought when you’re hit with a PR crisis (albeit of the company’s own making) that’s handled sub-optimally
now is the time to spend $1m on crack issues managers to protect what’s left of that global $150m ad budget, Herr Volkswagen….
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Das betrügen
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Das Schadenfreude.
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If they are willing to distort emissions testing, what are they doing on things that aren’t independently tested?
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This is an integrity issue, not a brand issue. Until VW demonstrates what it is doing for those who purchased its vehicles under its misleading claims and how this and its internal clean-up activities reflect its corporate values, investor confidence and scepticism will continue to wag the dog.
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As stated on VW’s corporate website:
“Not only does Volkswagen’s corporate culture focus on people, it also represents the sustainability of economic and social goals, corporate social responsibility”.
Faceless multinational’s will preach a load of values on their websites and in their reception areas for all to see and then rarely practice what they preach.
Guess who’s values these were: ‘Communication. Respect. Integrity. Excellence’.
– Enron’s
To be fair, the ad industry has it’s fair share of slime, who tart themselves up and yell to the world when they do something that helped the environment, or a charity; however continue to help faceless organisations sell brown fizzy death water, junk food and peddle websites that encourage people to have affairs; whats new?
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A car company founded by hitler is worried about how it is perceived? The name is still the same…
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