Brokeswagen TDI
Colin McGowan
In the last few years the German car company Volkswagen has been becoming more and more popular for their line up offering options for every type of driver. One of the types of vehicles Volkswagen offers has a TDI(turbo diesel) engine. This is available in the Volkswagen Golf Passat, and Jetta, that in previous years had been well renowned for the longevity of the powertrain and incredible fuel efficiency without sacrificing any luxuries. These cars that used to be the best option for sporty, reliable, and fuel efficiencient cars now has consumers looking the other direction. 
When the TDI option first hit the market, demand was high and over 500,000 models were sold in the first 14 months alone. The turbo and diesel combination allowed for these cars to get an average of 40-50 mpg, while also maintaining reliability for a few hundred thousand miles. This is exactly what fulfilled consumers wants and needs. Once other car companies saw what Volkswagen was accomplishing with turbo engines, they stepped up to compete. Other hybrid or electric cars are able to reach the same fuel efficiency, but never with near the same horsepower and torque. Sounds like it’s too good to be true. The cars may benefit the consumers wallets, but they’ve been putting a dent in the environment.
In order to register a car, every car manufactured after 1993 must go through an emissions test. An emissions test monitors the car’s computer and check the exhaust to make sure the vehicle isn’t polluting the air with too much fuel. The cars have an AFR(air fuel ratio) sensor in the exhaust that signals the engine to use less or more fuel. Volkswagen bypassed the regulations by setting up a system that could tell when the car was being tested for emissions. The car would then run under different settings that followed the emission standards, and return back to normal once the testing had finished. When investigators found this out, the cars were tested under their normal conditions and found to be putting out 30 times higher than the standard.
When the media found out about Volkswagen’s scandal, the company took a huge hit to their diesel department. Not only did Volkswagen take a hit as the demand of their cars plummeted, but the value of the cars dropped to an all time low and Volkswagen was left with a surplus. Volkswagen has set up a recall program that offers buyback or software fix in order to make consumers content with the situation they were put into, but the recall is only making Volkswagen spend more money. To originally make the cars run correctly and not cheat the system would have been a lower opportunity cost than the recalls and sales Volkswagen is paying for and missing out on.
As a car enthusiast myself, I am shocked by the situation at hand. Volkswagen has always been one of my favorite companies but I would have to side against them in this situation. I would sell back the car to the dealership and invest in a different company. My view on Volkswagen has changed and it just makes you wonder what else they could be doing.
Works Cited
Hotten, Russell. "Volkswagen: The Scandal Explained." BBC News. BBC, 10 Dec. 2015. Web.
28 Feb. 2017.
"VW Diesel Saga Hits 3.0-liter TDI Models: Buybacks Happening." Autoweek. N.p., n.d. Web. 28
Feb. 2017.
Due to Volkswagen offering different types of cars and new features in cars for every driver, the demand for this brand is increasing from many consumers. When the German car company Volkswagen offered the types of vehicle that has a TDI(turbo diesel) engine, what were the substitutes? Was there a high competitive market, or did Volkswagen only have these features in their new car? Without research, I supposed that other car companies that may have had to compete with them before the scandal were Mercedes, BMW and possible more. Additionally, this blog post is written really well and shows the supply and demand ratio before and after companies have issues.
ReplyDeleteWhen the investigator and the media found out that they were doing this scandal. And after Volkswagen took a big shot. What did they do to fix this. or get consumers to buy their cars again? But maybe they don't deserve to come back or get a second chance because of the amount of extra pollution their cars put into the air. 30 times the amount permitted is A LOT. And if there are millions of people driving these cars it can't be good for the environment. (Zach Roelandts)
ReplyDeleteThis is an example of how porters five forces come into play in a real life scenario; because people found out Volkswagen had been lying to their customers, the bargaining power of customers came into effect and is hurting Volkswagens profits. The bargaining power of customers would've been less impactful here if Volkswagen had been telling the truth the whole time and if they told the truth their profits may not have taken a hit.
ReplyDelete