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How should Volkswagen deal with its diesel problems?

The hounds of hell are bearing down on Volkswagen in the wake of allegations of cheating on diesel emissions testing. In just a single day, Volkswagen's stock has dropped 23 percent and the German government has announced that it is going to investigate a far larger number of vehicles over emissions violations. The American storm is quickly becoming a global one. Volkswagen sells over a million diesel vehicles a year and also has more than 13 percent of the automotive market overall – it was the number one automaker in the world up until the scandal. Yet in a matter of hours, Volkswagen has also become a pariah with potential fines and recalls that may be dwarfed by how the alleged lies and deceit change how governments and consumers view the company. Consumers are really going to be the key to the company's survival. It's those consumers who are really going to be the key to the company's survival. Every single one of them now finds themselves with a product that was sold illegally and may not be registered until recall work is done. What's worse is that Volkswagen doesn't yet have a solution for the emissions issue to offer these customers. It should also be noted that this is not the first time Volkswagen has found itself in violation of EPA emission regulations. Volkswagen is in a world of trouble, so what now? As a car dealer and former financial analyst who took several companies public, I believe Volkswagen can and should consider three points of action that would make an enduring difference in the times to come. 1. Offer affected TDI owners a compelling reason to stay with the brand. Recall work and a cup of coffee at the dealership are not going to be enough to placate current owners. Volkswagen should provide compensation for customers at the earliest opportunity and offer some type of inducement that keeps them within the fold. This shouldn't be the industry's version of a Chuck E. Cheese coupon - a small discount on a new vehicle. Volkswagen needs to offer something along the lines of a strong warranty extension of the entire powertrain (not just the emissions system) or some type of valuable feature upgrade for these vehicles so that owners feel that they have been treated fairly. Perhaps a combination of a brand new navigation system, software upgrades for the infotainment components, or some type of basic free WiFi service would be a healthy act of generosity.

VW could look outside its own ranks for next CEO

Companies have two options when coming up with succession plans – hire within, or go outside its ranks. Either choice comes with advantages and disadvantages, to be sure. Hiring within means generally getting someone familiar with the company and its culture and traditions, while going outside is ideal if you're looking to shake things up and bring in fresh ideas. It's unclear which avenue the Volkswagen Group will go down when it comes time to replace its head man, Herr Professor Doctor Doctor Herr Martin Winterkorn, but he isn't ruling out a trip outside of Wolfsburg. Winterkorn has already given the reins of the VW brand to former BMW board member Herbert Diess, while Andreas Renschler, a former Daimler board member, is heading up VW's truck group. Now, Winterkorn has made some statements to a German weekly that indicate the most important thing about his successor isn't necessarily his (or her, though no women appear to be on the short-list) previous employer, Motoring.com.au is reporting, so much as his qualities as a leader and an engineering background. "A Volkswagen boss has to have a big affinity to our products. He needs to be close to customers and he needs to have a relationship with dealers," Winterkorn told Stern. "Like always, it depends on the personality and it also helps if the candidate is an engineer." Motoring throws out a couple of potential candidates from within, including Porsche boss Mathias Muller, Audi Chairman Rupert Stadler and engineering guru Ulrich Hackenberg, in addition to both Diess and Renschler. And while each candidate has a lot of potential, the only thing that's guaranteed right now is what Winterkorn has already said: "The decision about who will succeed me is not an easy one for the supervisory board."

VW consumer site finally gets configurator tool back

The traditional vehicle configurator is back on the Volkswagen US consumer website, and it works very well. The company now lets visitors create a virtual model to their own specs and then search for a match among dealer inventories, as is the norm from most automakers. Last summer, Volkswagen tried to break the mold with its thoroughly redesigned consumer website in the US. It sported a slick design but made the highly controversial change of removing the configurator. Instead, visitors were narrowing their selection from a searchable database of models already at dealers. While the streamlined approach immediately told users if their desired car was available, the system also largely hid the prices for options and packages. The newly tweaked design retains the previous tablet-oriented layout, but after clicking a model, the site immediately offers "Build Yours." From there, visitors select a trim, and then the vehicle pops up with options to choose things like colors and packages. The whole layout is clean, features large buttons and works quickly. At the summary page, there's still the opportunity to search for the user's choice in dealer inventories. This is definitely a major improvement.