Volkswagen Reports Its Best-Ever Quarterly Profits as #Dieselgate Heats Up

By Patrick Coffee Comment

Back in October 2015, a Bloomberg column suggested that Volkswagen should return to its classic 1959 DDB “think small” campaign as the scandal called “Dieselgate” threatened to damage the company’s reputation and its bottom line. Various marketing and PR experts told Bloomberg, “Volkswagen should use simple ads that hark back to those early days to rehabilitate its tarnished image.”

The company will probably not take that advice.

We come to that conclusion primarily because VW reported its best-ever quarterly profit today. This happened despite the fact that the FTC filed a complaint against the company (which has been with Deutsch in the U.S. since 2009) for false advertising in March and that three state Attorneys General filed suit against the company this week for breaking the law with the full knowledge of executives in a multi-year scheme that was allegedly “orchestrated and approved at the highest levels of the company.”

VW also recently announced that it would pay an additional $2.42 billion in fines related to the scandal, which felled its former CEO Martin Winterkorn.

Back in February, VW ran a U.K. spot by adam&eveDDB that essentially told consumers to remember the things they always liked about the brand.

Today, from the WSJ: “The German car maker’s shares jumped more than 6% after it said first-half operating profit was €7.5 billion, boosted by an improvement at the Volkswagen brand between April and June.” Some analysts have doubts about the future health of the company given the scope and seriousness of the scandal, which will remain in the headlines thanks to the aforementioned suits. But that’s an impressive profit from a company that warned investors not to expect as much.

New York’s attorney general Eric Schneiderman made several big accusations, chief among them that the company’s new CEO Matthias Muller knew about the scandal 10 years ago and that the company “destroyed incriminating documents.”

Back in February, VW made some “very minimal” cuts to its Deutsch team, but we hear that the relationship between client and agency will continue for the foreseeable future.

Deutsch declined to comment for this post, and a VW spokesperson has not yet responded to a related email.

Call it a hunch, but we have a general sense that American consumers simply don’t care all that much about the fact that VW conspired to beat environmental performance standards. We’re more concerned about faulty airbags.

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