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Volkswagen Diesels: Buy, sell, or hold?

Everyone who owns or has remotely considered a Volkswagen diesel over the past 45 days has tried to figure out the right formula. Is it worth buying after the recall? If I own one, should I sell it? How will it perform if I want to keep it? Questions create doubts, and doubts create a stunning lack of activity when it comes to the new and used car market. I seriously doubt Volkswagen will be rolling out its 2016 TDI models anytime soon. The company already failed to create a fix nearly a year ago and has spent an unusually long amount of time trying to get the formula right. There's also the fact that it rescinded its EPA application for 2016 models. I can't provide the ultimate oracle's guide on whether any recalled Volkswagen diesel will fall under the "good value" perceptions of car buyers. But I do believe four factors in particular will be largely independent of the outcome of that recall, and they're what you should pay particular attention to if you plan on buying any Volkswagen diesel – new or used. 1. Demand Creating Bad Supply There are a large number of car buyers who believe that they can zig while the marketplace tells them to zag. Unfortunately, those are the ones that get sent to the slaughter once articles like the one linked above proclaim, "resale values are down 13 percent." These heavily biased write-ups ignore the fact both the supply and demand of new and used recalled Volkswagen diesels are no longer operating in that free market. The supply side is obvious since the EPA has put a stop-sale on all Volkswagen diesels. However, on the demand side, those Volkswagen dealers who have exclusive access to off-lease vehicles and certified pre-owned programs for 2012 and newer VW diesels are now sitting on the sidelines with all those cars. When your best players no longer play, consumers don't come to the ballpark. What exists right now is a lot like a professional sports strike where the talent sits out until a collective agreement is reached. When your best players no longer play, consumers don't come to the ballpark. The marketplace only offers scabs that can play an inferior game. In the wholesale car business, the scabs are salvage vehicles that are wrecked or flood damaged, vehicles that can't be put under a CPO program due to frame damage and lemon law requirements, and the wholesale repossession market. All of these substandard vehicles make up the new supply, the collective underbelly of low-end quality in the used car marketplace.

VW will expand goodwill package to larger diesels

Volkswagen Group of America will expand its goodwill package to affected owners of the VW Touareg and other models with the 3.0 TDI. The company may also replace the catalytic converter on some cars equipped with the 2.0-liter four-cylinder TDI engine to bring it into compliance with US emissions. VW Group of America boss Michael Horn told Reuters he plans announce the goodwill program's expansion to the 2009-2016 Touareg during the Detroit Auto Show, and company spokesperson Jeannine Ginivan also confirmed this to Autoblog. Audi intends to extend the offer to its affected owners, too. As with the previous goodwill package, participating customers would receive a $500 prepaid Visa card and $500 to use at dealers. The EPA issued a violation notice against the 3.0 TDI in November and later extended it to additional model years. Audi later admitted that the engine, which was also in the Touareg and Porsche Cayenne, had undisclosed emissions management software. However, the automaker limited the goodwill package only to the 2.0-liter powerplant while it investigated the allegations against the larger mill. VW has not announced a recall plan in the US for the 2.0 TDI so far, but VW Group CEO Matthias Muller recently outlined a possible solution that could fix about 430,000 of the 482,000 affected vehicles. "We have one [catalytic converter] in the works and we believe that will be a part of the technical solutions," he told Reuters. Muller plans to discuss the repair while in Washington D.C. on Wednesday to meet with the EPA. "I think we can now offer a package that will come very close to what the EPA is expecting from us," Muller said to Reuters. He also suggested the company might buy back some affected models but didn't confirm the recent rumor claiming that the buy-back may cover as many as 115,000 cars.

Lamborghini could be sold or spun off from the Volkswagen Group

Volkswagen is reportedly considering a sale or stock listing for its high-end Lamborghini brand. The German automaker is looking to fold the Italian supercar brand into a separate legal entity, reports Bloomberg, which cites "people familiar with the matter" who don't want to be identified "because the deliberations are confidential and no decisions have been made." Any of this sound familiar? The goal of spinning off Lamborghini would be to stockpile more cash and other resources for VW's massive planned push into electric vehicles. Back in March, reports circulated that Volkswagen's "Vision 2030" corporate plan might include plans to focus on the brand's core brands — VW, Audi and Porsche. That means the futures of fringe players like Lamborghini, Bentley, Bugatti, motorcycle brand Ducati and design firm Italdesign (and note this isn't a comprehensive list of brand's under the expansive VW Group umbrella) are up in the air. VW, according to the report, is targeting a market value of $220 billion, which is a big jump from the brand's current $89 billion valuation. Bloomberg pegged Lamborghini's valuation at around $11 billion back in August, buoyed by sales and profits generated by the introduction of the Urus sport utility vehicle. On the flip side, Lamborghini is currently grappling with how best to update its supercar lineup in the face of ever-increasing emissions regulations.