VW Puts U.S. Ads on Hold Amid Emissions Scandal

Automaker Pauses Majority of National Media

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VW Marketing Chief Vinay Shahani
VW Marketing Chief Vinay Shahani Credit: Volkswagen AG

Volkswagen of America is further reducing its media presence in the wake of its diesel emissions scandal by putting national advertising on hold for at least the next two weeks.

In a Friday memo to dealers obtained by Automotive News, marketing chief Vinay Shahani said the company would "temporarily pause a majority" of its national, "tier-one," media through October 11, effective immediately.

VW pulled all marketing related to its diesel-powered cars earlier this week as the scandal mushroomed. This latest step affects other campaigns, including the ad blitz with spots starring actors Adam Scott and Michael Peña for VW's App Connect infotainment platform debuting on its 2016 model year lineup.

VW announced the campaign Sept. 17, a day before the EPA and California emissions regulators revealed that some 482,000 VW diesel vehicles contained software designed to cheat on emissions tests.

"Ongoing press coverage and negative consumer social sentiment in the marketplace has effectively drowned out any positive messaging from our national App Connect campaign," said Mr. Shahani, who is vice president of marketing, in the memo.

While TV ads will be pulled, the brand will maintain some of is branding properties, including its sponsorship of post-game coverage on NBC's Sunday Night Football broadcasts to avoid forfeiting its presence on the highly rated live sports platform, according to the memo. VW will also maintain digital ads targeting in-market shoppers, Shahani said in the memo.

VW pulled diesel marketing at the tier-two, or regional level, replacing them with an "alternate message," earlier this week, according to the memo. The brand is evaluating its regional campaign strategy for the rest of the year and plans to recommend a new plan to dealers soon, Mr. Shahani said. The company is also working to remove new and certified-used diesel models from VW dealer inventory listings online, both on dealer websites and third-party sites like AutoTrader.com and ebay.com.

A VW spokeswoman confirmed the details of the dealer memos, noting that the advertising pullback was done to avoid confusing customers while the diesel stop-sale was in effect.

Also on Friday, VW revealed details of its plan to ease the financial burden faced by dealers accruing floorplan interest on VW diesel models in their inventory that have been grounded by the brand's stop-sale order on those models. VW will pay dealers $70 in September and October for each grounded new diesel model in their inventory, and $50 for each certified-used diesel model covered by the stop-sale. The funds will be issued in October, according to a memo sent to dealers Friday by VW of America COO Mark McNabb.

VW initially announced the floorplan assistance program announced Monday as part of a financial aid package to dealers wrestling with the crisis. That package also guaranteed bonus payments in September of $300 for each new car sold and $600 for each Passat, and guaranteed payouts under the VW brand's customer experience bonus program equaling 1 percent of sticker for each vehicle sold in the third quarter and fourth quarter.

Ryan Beene is a reporter for Automotive News.

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