Volkswagen has been haunted by the legal and reputation cost from what is viewed as fraud about emissions from its diesel engines. As might be expected, the price consumers will pay for these cars has plummeted. According to research from Kelley Blue Book (KBB), prices for VW diesel models have dropped 16%. And fewer people are shopping for the diesel models.
Source: courtesy of Volkswagen of America Inc.
The trends observed by KBB have to damage VW dealers and current owners more than anyone else. Inventory of diesel models stay on dealer lots, either unsold or sold at discounts that make their sale a financial loss. The price drop affects the owners due to a fall-off in the resale value of their cars. This second issue will trigger owner suits against the huge car company.
The research firm disclosed:
Kelley Blue Book www.kbb.com … report that average auction prices, along with new-car shopping activity on KBB.com, for Volkswagen diesel vehicles have declined four weeks after the diesel emissions issue was announced.
The average auction price for Volkswagen diesel models dropped by nearly 16 percent since the news broke of the emissions crisis. The average auction price for the brand’s gasoline-powered vehicles declined by 2.9 percent.1 On KBB.com, Volkswagen new-car shopping activity for affected TDI models has decreased on average by 2.4 percent
While shopping at KBB is not the same as data reported directly by dealers, it is almost certainly directionally correct.
Because people looking for new or used VW diesels eventually will buy alternatives, other car companies will certainly benefit. These manufacturers and their dealers probably have begun offering their similar vehicles as alternatives with similar mileage and features, which likely will drop demand for VW diesel cars further and continue to negatively affect their prices.
VW’s problems have spread well beyond the company itself, which will add to its problems substantially as the scandal goes forward.
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