More Reasons for Volkswagen to Flee US Market
Fines, lawsuits and other potential multi-billion-dollar risks continue to pile up for Volkswagen’s American operation. Apparently, the German car company gave some thought to abandoning much of the U.S. market. Some of VW’s dealers went to the manufacturer’s headquarters, at about the same time it dumped it U.S. President Michael Horn, to express worries that likely included whether VW would leave them adrift.
In exchange for all the aggravation and huge risks, VW continues to defend an American market share that has dropped to little better than 1%.
VW’s senior management has to continue to examine the financial reasons to defend it tiny U.S. sales. The latest financial burden added to VW’s American problems is a suit filed by the Federal Trade Commission, regarding false advertising about the features of its clean diesel engines. Billions of dollars in penalties, suits from buyers and more federal sanctions seem to increase VW’s American liabilities by the month.
For VW to dump the U.S. market, it would have to pay huge penalties to its dealers, who have spent years marketing VW products. Most have built showrooms to market the poor-selling cars. The dealers also have begged VW to add more models to what is currently a small lineup, which makes the U.S. operation far less than competitive.
The liability math for exiting the United States and adding to its dollar cost has to continue to be part of Volkwagen’s financial calculations. Defending a tiny American market share, for what?