VW PRESSES THE RESET BUTTON, YET AGAIN.

By Peter M. DeLorenzo

Detroit. Every few years or so of late VW undergoes a boardroom coup and a new leader emerges. This time it’s Herbert Diess, a German auto industry lifer who maneuvered the all-powerful supervisory board to get rid of the previous CEO, Matthias Mueller, who had been on the job for less than three years. That Diess weaseled his way in and around the supervisory board behind the scenes to lay the groundwork for Mueller’s ouster is not exactly a secret. But then again this is par for the course for a German company that seems to thrive on corporate intrigue and skullduggery, going way back to the Ferdinand Piech dictator days.

Mueller was summarily dismissed after having steered VW through the worst and most costly crisis in its history, the Diesel cheating scandal. That Mueller was able to do this while still delivering notable profits and developing a future product plan skewed heavily to electric vehicles is inconsequential at this point, because his time at the helm was abruptly, and for the most part undeservedly, ended. 

And like every new VW Group CEO before him, Diess is out to change VW’s way of doing business by rocking the too often conservative automaker to its core. This means jettisoning some current holdings accumulated over the years, like Ducati, and coming to grips with the fact that the VW Group has way too many employees by half. What Diess will be able to accomplish when it comes to cutting the company’s bloated workforce remains to be seen, but previous CEOs have always talked a good game but remained unable to deal effectively with the superpowerful unions. So that part of his new plan doesn’t bode well.

Another part of the Diess plan to jump-start VW is to focus on the U.S. market, taking a page right out of Mueller’s playbook. But this is something I’ve heard before too. VW’s marketers have been rumbling, bumbling and stumbling in this market for years, thinking they know what’s best for American consumers, while saddling dealers with ridiculously named products that were difficult to sell and handicapped right out of the gate. And though the clouds seemed to part long enough for the light to shine on the Atlas – both with the product itself and the name – VW went right back to their time-honored and confusing ways by displaying a concept for a mid-size pickup truck recently at the New York Auto Show called the Tanoak. Uh, excuse me, but WTF?

(VW)
The VW Tanoak pickup truck concept.

And despite the fact that VW operatives make some brilliant driver’s cars available in this market like the GTI and R, the reality is that the company’s product line in the U.S. is a mishmash marked by fits and starts. For instance, the all-new Jetta sedan comes better equipped with a lower price, but it’s so painfully conservative to look at that you’d have to be a devoted Jetta owner to give it even a second look. Not exactly the kind of inspiring product that will generate momentum in this market, that’s for sure.

(VW)
The new VW Jetta.

And what about the all-new Tiguan? After the success of the Atlas, you’d think that VW operatives would take a flyer at a new name for the small crossover to give it some real juice in the market, but no. Not only that, the “new” Tiguan is another blandtastic design that doesn’t resonate in the least. And it’s too heavy and gets marginable mileage to boot. Not exactly a recipe for success to put it mildly.

(VW)
The new VW Tiguan. 

Yes, VW has some products in the works that show promise, like the Arteon, which is the successor to the CC but then again, it’s a sedan in a SUV-crazed market so what are VW dealers supposed to do with it? Sell it as a junior Audi?

(VW)
The VW Arteon. 

And then there’s the new five-seat version of the Atlas SUV, which dispenses with the third row and injects more style into the equation. Now this product does have real potential, and it should be here by the end of the year. So there’s that.

(VW)
The five-seat Atlas.

And then, of course, there’s the VW I.D. BUZZ concept, the all-electric bus that if executed properly should be a grand slam, frickin’ home run. But that’s a big “if” and it’s two long years away.

(VW)
The VW I.D. BUZZ concept.

Memo to Mr. Diess: If you really want to focus on the U.S. market, I suggest you and a handpicked team of product planners, engineers, designers and marketers come over and live here for one solid month. Roam around, take in the sights, and then really listen to people and observe, more than you talk. You can start by listening to the American VW operatives already in place, including the long-suffering dealers. They know and understand this market better and with more depth than you and your colleagues ever will. That means setting aside the built-in tendencies of every German auto executive who has ever walked on the face of this earth to think that they know better than anyone else in absolutely every given situation, especially when it comes to the U.S auto market. This just in: You don’t, Mr. Diess… and neither do your cohorts.

Pressing the reset button for VW - yet again – is a noble endeavor, Mr. Diess. But it’s fraught with peril brought on by classic executive intransigence and the “we know what’s best for you” syndrome that runs rampant throughout VW headquarters in Wolfsburg. And if you can’t break through that and bury it for good, it won’t matter how good the I.D. Buzz is.

And that’s the High-Octane Truth for this week.