Volkswagen Brand Takes Image Hit as Emissions Scandal Grows
The growing emissions scandal at Volkswagen is starting to harm the automaker's brand image on social media and beyond, although its Audi brand appears to be sheltered some, according to new data.
The YouGov BrandIndex, which tracks daily consumer perception, found that Volkswagen's score in the U.S. as of Monday reached its lowest point since at least Jan. 1, 2009. The automaker's "buzz" score had been hovering in the 10 to 11 range and now it is at -2 and "most likely to drop even further," according to YouGov. VW is taking a bigger hit in its home base of Germany, where the buzz score plummeted to -8 from its normal 18 to 22 range.
YouGov BrandIndex CEO Ted Marzilli compared the situation to the unintended acceleration crisis that struck Toyota five years ago, prompting massive recalls.
"When Toyota had its global recalls back in 2010 and the company's chairman had to appear in front of Congress, it took more than a year for them to recover in perception," Mr. Marzilli said in a statement. "It was also one of the biggest U.S. brand crises in the last five years. As more news about this [VW] story is revealed, we could see the scores impacted even more. For Germany, this is a matter of national pride, so it is not surprising to see their score take a bigger drop."
Volkswagen's woes started last Friday when news broke that the automaker had allegedly duped regulators and violated clean air rules by installing software intended to evade emissions tests. About 11 million Volkswagen vehicles worldwide have diesel engines with software "irregularities," Bloomberg reported Tuesday, noting that the automaker plans to set aside 6.5 billion euros ($7.3 billion) in the third quarter to cover the costs of addressing the issue.
"Our company was dishonest with the EPA, and the California Air Resources Board and with all of you," Michael Horn, the head of the VW brand in the U.S., said Monday night in Brooklyn, New York, where he was revealing a redesigned version of the slow-selling Passat sedan at an event featuring rock star Lenny Kravitz. "And in my German words: We have totally screwed up. We must fix the cars to prevent this from ever happening again and we have to make this right. This kind of behavior is totally inconsistent with our qualities."
But the VW brand faces an uphill fight in winning back consumer trust, according to conversations occurring on social media.
The number of negative tweets involving Volkswagen jumped to 16,070 between Sept. 18 and 21, compared with just 766 negative tweets in the four days before Sept. 18, according to Amobee Brand Intelligence, a global marketing technology company that monitors digital content across more than 600,000 sites. Amobee found that 24% of all digital content engagement around Volkswagen from September 18 to 21 mentioned "emission." That compares to just 10% of content that mentioned "emission" Sept. 14 to 17.
The emissions issue affects the Volkswagen-owned Audi A3 vehicle. But consumers appear to be giving the Audi brand a pass so far on social media, according to Amobee. Audi's negative tweet sentiment was 8% negative Sept. 18-21, compared with 9% negative Sept. 14-17. Even though some Audi vehicles use the technology in question, the issue is "primarily being associated by the digital audience with the parent company," according to Amobee.
Still, Assaf Henkin, SVP of Amobee Brand Intelligence, said in an email that "analysis of Volkswagen and Audi reveal that consumers are paying attention to what these brands do in relation to the environmental impact of their vehicles. This is an opportunity for both brands to be transparent with drivers and leverage paid, earned and owned media to show how they are going to move forward to address the issue." He added that "Audi is actually in an optimal position to quickly redeem any negative sentiment around their brand, where VW may take more time."
A Volkswagen spokeswoman did not immediately respond to an email Tuesday morning asking about future ad plans.
As of Tuesday morning, Volkswagen continued to run ads on TV, mostly a spot that broke last week called "Party" that features celebrities including Adam Scott and touts VW's smartphone integration technology known as "App-Connect," according to ad tracker iSpot. Audi, meanwhile, continued to run TV ads using its "Truth in Engineering" tagline.
The last brand post on Volkswagen USA's Facebook page came last Thursday and included a video of the Adam Scott ad, while noting that Mr. Scott "is throwing a party. Are you on the list?" But some fans commenting on the post were not in a partying mood. Stated one fan: "As someone who has owned, driven and loved Volkswagens for more than 40 years, because of your criminal actions, I will probably NEVER buy another. #BoycottVW Shame on you." Another fan simply posted: "Das Cheaters"
-Bloomberg News contributed to this report