MORE DELUSIONAL THINKING BROUGHT TO YOU BY VW.

By Peter M. DeLorenzo

Detroit. Every time this business seems to be lulling itself into a tedious holding pattern of waiting for “The Grand Transition” (or is it Waiting for Godot?) to EVs – with the mind-numbing cadence, predictability and years this will entail – blundering controversy always seems to be never far away. This week, it’s those rumbling, bumbling and stumbling executives from Volkswagen AG who have come to the front of the line, broadcasting their thought balloons out loud much to the consternation of everyone, especially their long-suffering U.S. dealers.

What have those preening – “we’re geniuses, just ask us” – VW executives unleashed on their unsuspecting U.S. dealers this time? VW dropped the news – totally out of the blue, of course – that the company would produce a pickup and off-road-oriented SUV for the U.S. market under the Scout name, not VW, beginning in the year 2026. 

There was very little substance to the announcement beyond that, which made VW dealers crazy and highly suspicious as to what VW’s CEO, Herbert Diess, was really up to. Was Diess aiming to cut U.S. VW dealers out of the equation and sell directly to consumers? That is a distinct possibility, as it’s commonly known that Diess is a huge, unabashed fan of St. Elon. And the fact that there were basically no other details – as in zero – about the plan forthcoming pretty much confirmed those suspicions. No plant details, no initial marketing strategy, no nothin’. Just, “Ya, we’re gonna have them in-market by 2026.”

Do the U.S. VW dealers have good reason to be suspicious? Absolutely. The German-based VW executives have a long history of abusing U.S. dealers. The abuses include: 1. Failing to acquire even a modicum of understanding of the U.S. market, let alone care. 2. Dim-bulb marketing and strategic decisions based on these same executives’ “gut feel” for what the U.S. market needed, rather than listening to direct feedback from the people who actually knew the market, aka the VW dealers. I could add several more points, like shoving unpronounceable (and nonsensical) names on VW vehicles bound for the U.S., based on the fundamental assumption made by those same German VW executives that they knew what was best, and besides, the dealers would make it work somehow. And the Germans’ steadfast refusal to listen to their U.S. dealers about the need for a larger, competitive SUV for this market to the point that it was almost too late by the time the Atlas arrived on the scene. (The Atlas has proved to be a profitable lifesaver for the brand here.) 

You’re damn right VW dealers here in the U.S. have every reason to be wary of Herbert Diess and his longing to be considered a futurist and an EV visionary when it comes to cementing VW’s future status in the “Grand Transition.” Diess’ delusional thinking is no real surprise, either, considering it has been a trademark of every German auto executive over the last 40 years, at least (see Dieter Zetsche’s “Smart car” folly, for just one glaring example). 

The train of thought for these German auto executives goes something like this: 

“I am a genius, and it will be better for all of us if you just accept that fact.” (To be fair, this applies to certain notorious U.S. auto executives too.)

“My gut feelings are far better and more accurate than any research, in-market dealer input or other reasoned advice, especially from the denizens of our U.S. market outposts.” (Ditto, see above.)

“Anyone who questions my directives or orders will be exiled to an inconsequential position, never to be heard from again.” 

But then again, none of this is surprising to any German brand dealer here in the U.S. It’s all the same refrain whether it’s Audi, BMW, Mercedes-Benz or Porsche. The horror stories from these dealers are eerily similar, and they all revolve around the fact that there has never been a more miserable lot of so-called “executives” who have done less with more than your typical German auto executive. Paraphrasing what Joe Pesci famously said in Casino: “These guys could fuck-up a cup of coffee.”

I’ll give you a couple of examples. Remember when BMW’s German executives adopted the simple word “Joy” for a global redirect of its advertising? And then they proceeded to try to shove it down the throats of its U.S. dealers? The same dealers who had been living, breathing and nurturing “The Ultimate Driving Machine” - one of the most iconic auto advertising themes of all time – for over 30 years? Yes, BMW executives in Germany actually tried to get the U.S. dealers to adopt “Joy.” And needless to say, it did not go well. BMW’s German overlords backed down, and “Joy” was never heard from or seen again here in the U.S., and “The Ultimate Driving Machine” lives on.

And then there’s Mercedes-Benz. M-B executives are the acknowledged Kings and Queens of doing less with more. They have botched model launches, tried to pawn-off faux Mercedes as real Mercedes, tried to convince the American consumer that the Smart car was actually worth considering, squandered decades of a once-glorious brand history by unleashing innumerable marketing screwups, unloaded too many models in this market by creating niches upon niches that only served to confuse buyers, while conveniently ignoring the fact that their dealers weren’t asking for them. I could go on, but you get the idea.

That’s why this latest Diess-led VW initiative has all the signs of yet another German auto executive directive based on “We know what’s best for you, even though you’re too stupid to figure it out for yourselves” kind of a play. Except this initiative stinks to high heaven, and if I were a VW dealer, I wouldn’t let Diess and his minions get away with it. 

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

(VW)

The Scout renderings released by VW last week.

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