Dieselgate barely a blip for VW here

How do Kiwis feel about Volkswagen’s emissions scandal a year on?


EVENTS of September 18, 2015, are still clearly imprinted into Tom Ruddenklau’s memory - and will likely always be.

“It’s not something I will ever forget, that’s for sure,” he says in reference to the day the German brand’s world fell apart.

One year and two weeks on from what has become known as Dieselgate, Volkswagen New Zealand’s general manager is sleeping comfortably again.

While the parent in Germany is still very much imperiled by the emissions scandal triggered by admission it was using a cheat device on the exhausts of its diesel cars in order to meet tough American market compliance, here in New Zealand VW is back on track as the leading European brand.

Moreover, Ruddenklau and his colleagues who run the VW operation for national rights’ holder European Motor Distributors, might well believe they have at least 500 reasons to imagine their customer base has by and large moved on from the blackest issue in the brand’s post-war history.

That number? It’s the local market order count for the first brand-new car that VW has released since Dieselgate.

The importance of the Tiguan crossover (above) cannot be understated. Consumer preference for sports utilities has grown progressively in New Zealand and the month before this medium model arrived was a particular landmark, being the first occasion crossover type registrations finally outstripped all other passenger vehicle segments.

So the climate is right. Yet there was trepidation within VW NZ’s Auckland office. Being the first all-new model since Dieselgate meant Tiguan was unavoidably going to be a test of brand values. What also didn’t help was that the outgoing range was directly implicated in the scandal because it was among those vehicles that ran the ‘dirty’ engine.

Admittedly, New Zealand can account for just a few hundred diesel Tiguans out of the 11  million cars worldwide running the EA189 common rail diesel engines with the cheater software that could detect when it was running a lab test and switch to an engine management programme that minimized those nasty nitrous oxide emissions.

Also, while Kiwi owners of these and Golf and Jetta turbodiesel sedans could feel aggrieved their cars were caught up in this unsavoury business, they still had nothing to lose. The US laws that were broken have no equivalent in New Zealand. Not then. Not now. Indeed, our country has no particular exhaust emission regulations covering this sort of thing.

Even so, and despite having also moved quickly to placate customer concerns; providing the fix – a software patch – that, ironically, renders the engine dirtier and less economical, the local office still had some jitters.

That’s why they sent the Tiguan on a road show before its public release; it seemed the best possible way to gauge the public move.

And the response was? National sales manager Rodney Gillard (below) was doubtless delighted his clothing went un-egged and his sensitivities weren’t damaged. Customers flocked and generally even those who expressed criticism of the brand’s misdeeds were nonetheless complimentary about how VW NZ had handled the crisis. Moreover, they came in with cash – laying down deposits for the new model; so many, in fact, that it has become the most successful vehicle the modern-era distributor has ever launched here.

Ruddenklau puts the positive reception down to various factors. It’s obviously the right car at the right time, he cites. Beyond that, he wonders if this is also a reminder that good customer service does pay off.

He admits that whole VW NZ thought it had established a reasonable customer relationship before this issue, it has worked even harder to improve it since.

“We’ve learned a lot and focused on doing the little things better, on putting the customer at the centre of things a bit more.”

Also, he thinks it says something about the Kiwi psyche that, even at the height of local hysteria – which some self-aggrandising commentators unashamedly sought to stir beyond reasonable level – most actual customers took the news calmly, weighed up the pros and cons and simply dealt with the matter.

He’s not suggesting Dieselgate is dead and buried here. “The last 12 months haven’t been without challenge. There are customers that have been upset and are still upset.”

Even so, there are clearly many who have chosen, if not to forget, then at least to forgive and move on.

“As a result of this issue, I’d say the business is in a better place … I would say the brand has been questioned and I would say that the team’s commitment to the brand, which has been amplified by the Tiguan, has got us through. I’m not going to be naïve and think that this hasn’t caused damage ... I think it has.

“But through adversity comes opportunity. We are in a better place than we were this time last year, that’s for sure.”

Certainly, in a boom vehicle sales period, the VW count has been down year-to-date, by about five percent, but the Tiguan’s impact will likely mean “we’ll end the year about even, if not a smidge ahead”. He can live with that, Germany too.

Speaking of head office. Wolfsburg when, having been utterly bruised by the initial controversy, it received a call from the NZ outlet, announcing a rather special success. VW NZ wished to inform it had picked up a Roy Morgan customer satisfaction award. Ruddenklau laughes when recounting the reaction from the top.

“The factory just couldn’t believe it. They just couldn’t comprehend how we could achieve that when every other market had the odd challenge or so.”

The ‘odd challenge’?!?!?. Well, put that with Hillary’s famous ‘knocked the bugger off’.

Dieselgate hardly makes any headlines here, yet it’s still a festering mess. The huge compensation sum paid to the US – which accounted for just 600,000 vehicles - is just the start; another big wallet wallop seems set to occur in Europe, where most of the cars reside. The deception is also hurting in other ways; in July South Korea banned the sale of VW and Audi cars and legal moves are pending in at least another 10 countries.

Talking to media at the Paris motor show, VW Group boss Herbert Diess admitted it will take years for his operation to repair its namesake brand’s tarnished image. Even though VW global sales are back on the rise, with a 4.7 percent gain in August (again, helped by Tiguan), the man who joined Volkswagen from BMW Group a few months before the crisis erupted imagines "we have three to four tough years ahead of us to really restructure the company and getting more profitable and more competitive."

VW Group has been using the emissions-cheating scandal as a catalyst for deeper reforms. The VW brand was struggling even before the crisis, and the company is now in discussions with unions over concessions in exchange for investment guarantees and agreements to retrain workers in the transition away from traditional combustion engines.

The car line is also heading in a new direction: Diesel tech has taken a back seat to electrics. The ID concept (left) presented in France’s capital is being to groundbreaking models such as the Beetle and the Golf. It boasts a 400-600km range, almost twice as far as Tesla's forthcoming Model 3 sedan and is the flagbearer for a strategy to deliver up to 30 new battery-prioritised products by 2025, most of them to be VWs but some set to be Audis.

Volkswagen is also pushing into services such as ride-hailing and self-driving shuttles. The company the new division will be its 13th brand, putting it on the same footing as Audi, Porsche and Skoda and underscoring its ambitions. The shift in direction puts VW Group on a collision course with a new kind of competitor, Diess told the Automotive News website.

"We are mainly targeting with this new product - which is always online and only electric - the new competitors like Tesla could be or Apple might be or some others. The good times will start with the new age of mobility."