Can VW Kiss and Make Up with a Commercial?

vw blog

In early June 2019, Volkswagen released its Rebirth campaignan attempt to once again acknowledge its past wrongdoings and turn a new page.

(Or to borrow the language from the campaign itself, when life gives you lemons, make lemonade.)

Before we look to the future of Volkswagen's reputation, and assess the impact of this campaign, let's review the aftermath of its past actions. Here's a look at VW's reputation prior to the Rebirth campaign.

In 2015, Volkswagen made headlines when news broke that the US Environmental Protection Agency (EPA) spoke out about the wrongdoings of the German carmaker. The company that once coined the term "clean diesel," had actually been using software to cheat on diesel emission tests, and . The tests weren't the only things cheated on, though; Volkswagen let down its customers, regulators, and the general public. The company had a substantial negative impact on the environment (cars were emitting 40x the allowed US emission standards), while also breaking its promise to its key stakeholders.
 

The result: a loss of trust, declining reputation and free-falling stock price performance

vw blog chart 1


The initial damage of the scandal resulted in a 9.4-point reputation decline, bringing Volkswagen's reputation in the US from an almost excellent score to just a point away from the weak range.

The culprit: the public's perception of the company's corporate responsibility. Two key components of how we measure corporate responsibility (CR) are Governance and Citizenship. Between Q1 2015 and Q1 2016, Volkswagen's Governance score dropped by 19.6 points, moving from strong to weak, and its Citizenship score followed suit with a 15.5-point drop.
 

In summary: Volkswagen's reputation is fragile. The public doubts if the carmaker is ethical or cares about the environment

Volkswagen's public apology and stipends to the owners of the affected cars seem to have had a positive impact. In 2017 Volkswagen's reputation started to recover with a 3.7-point increase; however, this does not turn into a trend over the next two years. Since 2017 Volkswagen's reputation in the United States has plateaued, remaining in the low to average range.

Fast-forward to 2019compared to the initial post-crisis decline, the perceptions of Volkswagen as an ethical company and a good corporate citizen are recovering.

Here's the lay of the land:

  • Their Governance score increased 8.1 points and moved to the average range, but remains Volkswagen's lowest score among the 7 drivers of reputation.
  • VW's Citizenship score increased 6.6 points and moved into the average range. This improved their overall CR score, as well.
  • Despite the recovery for corporate responsibility metrics, the company's Innovation score suffered. Compared to 2016 data, Volkswagen's 2019 innovation score declined by 8.1 points, showing that the public is questioning the carmaker's ability to continuously innovate and be first to market.

 

All in all, at the beginning of 2019 Volkswagen's reputation scorecard is average across all metrics. Volkswagen's highest scores are in Financial Performance and Products. Their weakest areas are Governance, Innovation and Citizenship.

 

Performance

Products

Workplace

Leadership

Citizenship

Innovation

Governance

1

2

3

4

5

6

      7

 

Volkswagen has work to do to improve in their key areas of business — especially since Governance and Innovation are among the top three most important drivers of reputation for the US automotive industry this year. They must continue their work to rebuild trust and the emotional connection they have with the public.

Volkswagen's newest ad campaign surely is trying to do just this. The commercial itself goes straight for the heart. The mea culpa start with a nod to the scandal, the sentimental lyrics of Simon and Garfunkel's Sounds of Silence, the movement from the darkness to the light, and ultimately the reveal of the classic-turned-electric Volkswagen bus is truly an effective emotional appeal. What's interesting is that in its "rebirth," Volkswagen is going back to basics; more specifically, they to their iconic and well-loved Volkswagen bus, hoping it will launch the brand into the future and help repair its image.

The commercial delivers on a few fronts:

  • It is once again attempting to apologize for its missteps while being transparent. This is always a positive.
  • The campaign addresses the area of innovation as it is revealing a new design of an old model, as well as their electric car technology. This is also beneficial as they are showcasing a car that is good for the environment and sustainable.
  • Finally, this is a clear attempt to re-establish the emotional connection with the general public.

 

The one area that is not addressed is Governance. Yes, they are being transparent about the past, but there is not much information about the future. Is this product of the highest quality according to global compliance standards? What is the story behind the product and technology?

Then again, this may be more than just an ode to lemonade as the advertising implies. Maybe they are simply adding a little sweetness back to the brand allure, during what has otherwise been a bitter time for VW's reputation.
 

Download our latest CR RepTrak report

 

ANA blog


Ana Angelovska
Research Director
Reputation Institute
aangelovska@reputationinstitute.com 

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