By now everyone on the planet knows about Volkswagen's troubles. Quite simply, Volkswagen knowingly and maliciously installed software in their “smart diesel” cars designed to provide false emissions readings to government testers around the world. Estimates are that Volkswagens pollute at levels 40 times greater than U.S. government rules allow. Not twice as bad or even three times as bad but 40 times worse.
If you think that Volkswagen is screwed right up the ol' fahrvergnügen, you're right. They company has already lost over $18 billion and that's probably just the tip of the iceberg. But don't count the world's biggest car company out. Because if every cloud has a silver lining then Volkswagen could find out that this is a great opportunity too.
First let's look at why this is such a problem for Volkswagen. After all, Toyota, Audi, GM, Honda, and others have all suffered disastrous PR gaffes and come back strong. But this time it's different. Because while those issues were bone-headed mistakes, Volkswagen's incorrect pollution readings were not caused by an error – the company knowingly misled the regulators. This was not an accidental flub; it was a deliberately perpetrated crime.
In a perfect world, Volkswagen would be the perfect company to push their smart diesel technology. Their brand's authentic truth had been built and confirmed across years of vehicles like the Beetle, the Bug, the Microbus, the Rabbit, the Golf, and the Eos. Volkswagens were warm, fuzzy, friendly, and trustworthy. Clearly Volkswagen's admission of guilt violates this trust.
Worse, the drivers Volkswagen deceived feel particularly wronged because they thought they were saving the world and now that the emperor has no clothes they've discovered that they've actually been poisoning the atmosphere, pumping 40 times more pollutants into the heavens than they thought.
So how can this possibly be good for Volkswagen?
Once the smoke clears and Volkswagen has cleaned house and fixed the immediate problem, they have the opportunity to do something huge. Instead of just slinking into the corner and hoping no one remembers their crimes (a very likely scenario, by the way), Volkswagen should marshal their considerable resources of money, engineers, multinational facilities and take the leadership role in the green revolution, dedicating themselves to truly creating environmentally safe automobiles.
Besides saving the company itself, this strategy will also help Volkswagen, colloquially known as “Germany Inc.”, save face for their entire country.
Of course proper brand strategy promoting this new authentic truth will be an important part of the company's rebirth. But before that can work, Volkswagen has to commit itself to following a new path that will not only help undo the damage they've already done but will also re-engage customers and build a new sense of pride and purpose for the company, the country, and its fans around the world, instead of just applying a marketing band aid to the wound.