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AutoNation CEO: Not Worried By VW Crisis | DrivingSales News

AutoNation CEO: VW Crisis Was A ‘Systemic Failure’

September 24, 2015 1 Comment

The CEO of the largest dealer group in the nation had a lot to say about the Volkswagen emissions scandal. He took to CNBC to voice his opinion. Mike Jackson, the CEO of AutoNation, appeared on CNBC September 23 to share his opinion about what the fallout from the Volkswagen emissions scandal. Jackson feels the VW situation was a systemic failure.

Speaking to CNBC, Jackson said, “The scale of the deception, over six years, 11 million vehicles, challenges from the regulators starting three years ago. Already having one recall last year that didn’t really resolve the issue at all. It all points to a systemic failure at the largest auto manufacturer in the world.”

Jackson as the chief executive of AutoNation leads a group that is the largest seller of Volkswagen vehicles in the U.S. However, Jackson isn’t worried and reminded viewers that his group already has their own recall policy.

“In the AutoNation portfolio, VW represents less than 1 percent of our business so it’s very manageable,” Jackson told CNBC. “We made the decision and its now implemented, that we will not retail or wholesale any vehicle that has an open recall.”

Jackson’s words come as U.S. Volkswagen dealers are trying to sort out the mess. Volkswagen will compensate VW and Audi dealers for the cars on their lots they cannot sell, new or used. However, looking past the present into the future, this scandal by Volkswagen could heavily impact their growth goals.

In January 2015, the Detroit News reported Volkswagen would like to add 100 more dealerships in the U.S. ahead of 2018. Certainly a drawn out and poorly managed emissions crisis could hinder that growth. On the other hand, a powerfully directed clean up of Volkswagen’s reputation and well managed recall effort could help Volkswagen put more dealerships in the U.S. during the next three years.

What is your opinion of the Volkswagen emissions crisis? Do you think the impact for dealers will be minimal or far-reaching? Finally do you believe VW’s plans for 100 dealerships in the U.S will move forward despite the current crisis?

About the Author:

The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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    It will be interesting to compare how Volkswagen AG and Volkswagen of America manage the recall of their TDI diesel equipped vehicles from 2009 through 2016. When firms like Toyota Ford and even recently General Motors were caught, self-reported, or discovered issues worthy of airbag and ignition recalls they moved slowly but deliberately. Now we watch the Dodge truck recall and see if firm that is actively buying back vehicles at a near premium. The Takada airbag recall took less that 2 hours to repair in my Toyota Tundra.

    As a VW TDI driver, I got three invitations to join class action suits against Volkswagen in the first week. Perhaps I should’ve kept them but I trashed all three plaintiffs attorneys letters. To be fair, I am not litigious and feel plaintiff attorneys have their place just like unions, but here too more often than not neither improve situations. I really like my Volkswagen Passat TDI. The car is roomie, gets great gas mileage, and passed all the requisite safety test. However, I’m already seeing a declining value for my car as firms like AutoNation declare that they will not sell vehicles like TDI since they have an active recall. So when you don’t want to join a class action suit but you want to preserve value, what are your options? My step one was to write to Volkswagen of America, and to ask them. I’ll let you know if I hear anything and of course, i’m hopeful but not gullible. I recall a few years back when I had a 2009 Jetta TDI sport wagon that there was a recall for something related to the DSG transmission. It was minor, but Volkswagen immediately issued a statement and send all owners an extended warranty of up to 100 K miles for the original owner to want any transmission. This is much different as owners of up to a half million cars, have already felt $1-3k devaluations. A letter can’t fix values.

    So what will Volkswagen do? I recall and troubled times in the early 80s that Volkswagen closed their US in Pennsylvania And increase their footprint in Mexico. Then as firms like Toyota, Nissan, Subaru, Mercedes, BMW, literally everyone else from Japan but Mitsubishi opened US plants, so return to Volkswagen to Tennessee to build the Passat. One has to wonder how with claims of a half-million defective cars, a looming maximum fine of $37,000 per vehicle from the EPA, and what must be dozens of class-action lawsuits, what this will cost Volkswagen. Personally the financial loss, can’t possibly equal the loft in confidence and trust that must be regained from consumers around the world. Anyone want to buy a slightly used car manufacturing plant located in beautiful Tennessee? Somebody call Mitsubishi for me.