Buyback and Blowback

Volkswagen is still trying to get out of the shadow of the diesel emissions scandal, and it's not doing too well, despite its best efforts.  The company is now setting aside $8.8 billion to buy back or fix nearly 500,000 Turbo Direct injection (TDI) diesel-powered cars sold in the U.S., but that's only less than half of the projected $18 billion that the scandal is expected to cost VW worldwide.  (Also, the deal doesn't cover three-liter TDI engines; only two-liter ones.)  The company says that it believes the worst of the scandal is out in the open as that it is ready to turn the corner in 2016, with sound financials and improved product going forward.

But first it will have to figure out how to handle customers like this.

I suspect this woman is in the market for a Honda Civic hybrid. :-(

Volkswagen still faces possible monetary costs in Europe, billions in U.S. Clean Air Act violation fines, and a financial situation that has put it in the red for 2015 - a $1.8 billion loss after VW had made a nice $12.2 billion profit for 2014. Add to that the numbers of VW's sales across its various brands in the U.S. - down 7 percent through the first three months 2016 compared to January to March 2015, even as overall U.S. auto sales are climbing - and you have yourself a problem.

It remains to be seen how Volkswagen plans to compete in the U.S. market going forward.  Will the VW brand try to continue striving toward a mass-market image?  Or will it become a Subaru-style niche brand, which some folks say it already is?  Any way you slice it, this is the worst crisis Volkswagen has faced in America in over twenty years.  The way I see it, Volkswagen has survived near-death experiences in America before, so I am cautiously optimistic that it can get through this.  And once it does, I hope VW gets back on its feet.

On the bright side, if you want a Golf or Jetta, you can probably get a good deal on one.  Just don't wait for the TDI engine to come back.