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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.

Porsche CEO Oliver Blume will be installed as head of the VW brand

Volkswagen Chief Executive Herbert Diess is planning to promote Porsche CEO Oliver Blume to take over as the head of the VW brand, according to a report from Auto Motor und Sport. Citing company sources, the German site said Bernhard Maier, who currently sits at the head of VW's Skoda brand, will lead Porsche in Blume's place. A shuffle at VW isn't surprising. The last thing Volkswagen needs as it transitions away from its long-running "clean diesel" TDI fiasco and into a clean electric ID future is negative press surrounding its burgeoning electrified lineup. Unfortunately, the ID.3 launch has been marred by software issues, with Manager magazine citing company engineers saying "the basic architecture was developed too hastily." Because of that underlying issue, various modules "often do not understand each other" and suffer dropouts. The brand-new eighth-generation Golf launch was also troubled and pushed back due to software problems. And more recently, Volkswagen was forced to pull an advertisement after admitting it was racist and insulting. That marketing misstep, according to the report, will lead to the firing of Chief Marketing Officer Jochen Sengpiehl. Related Video:

FCA to pay buyers $1,700 to swap out of scandal-mired VWs

FCA is trying to gain some sales from arch-rival VW in the competitive European market by offering potential buyers in Italy up to $1,700 to swap into an FCA group car. While the promotion isn't specifically targeted at TDI owners affected by the emissions scandal, it is clearly intended to turn dissatisfaction with VW's defeat device cheat into additional sales, Bloomberg reports. The 500-1,500 euro incentive (roughly $560-1,700, depending on vehicle) stacks on top of any other rebates or deals applicable, and applies if a buyer brings in any of Volkswagen Group's cars – including Audi, Skoda, and SEAT, among (many) others. As Bloomberg notes, it's normal for automakers to offer "conquest" deals – giving a buyer cash for trading in a competitor's vehicle. Those deals aren't usually limited to one company's products, however; FCA's program looks specifically to take advantage of VW's legal and public relations nightmare. FCA isn't the only automaker trying this trick in Italy. Automotive News Europe also reported that Ford is offering approximately $840 in incentives across its entire range to owners of VW vehicles seeking to trade in for a Ford. No word of yet as to whether these incentives will spread beyond Italy or to other automakers.Related Video: