USA TODAY US Edition
THIS YEAR, IT’S ABOUT TRUST, NOT JUST NEW CARS
As the nation’s most closely watched auto show gets underway in Detroit, the challenge facing automakers isn’t just wowing consumers with new models. It’s about winning back their trust.
The North American International Auto Show, opening Monday, represents a chance for the auto industry to explain how it will deal with a series of scandals — from Volkswagen’s diesel emissions lies and General Motors’ deadly ignition-switch debacle to industry supplier Takata’s failure to fix exploding air bags.
“In one horrific scandal after another, multiple car companies have promoted sales over safety,” said Stanford University law professor Nora Freeman Engstrom, who specializes in corporate liability and ethics. In November, consumer perception of auto companies dipped to its lowest point in the three years since market-research firm YouGov began tracking the figures daily.
The scandals have triggered fines, fresh regulatory oversight, lawsuits and criminal probes — everything but a long-lasting sales slump. But over time, sales could be undermined by the Millennial generation’s refusal to buy products from corporations that it holds accountable for ethical lapses. “As they become a larger portion of the market, car companies are going to be held accountable,” says University of Michigan business professor Erik Gordon.
Some consumers are already taking honesty into account. Jeff Selby from Elmira, Ontario, in Canada, traded in his diesel Volkswagen Jetta in November for a Ford Escape after becoming disheartened at the “clear deception” of VW’s past ad campaigns. “We were furious over the fact that we were lied to,” he said.
So far, automakers aren’t feeling sales pain: U.S. sales hit an alltime high of 17.5 million in 2015.
Auto companies say they’ve taken steps to overhaul safety processes. GM, Takata, Fiat Chrysler, Toyota and BMW each accepted some form of independent monitor. Volkswagen CEO Matthias Müller, speaking Sunday at a Detroit auto show event, pledged to regain the public’s trust. He said VW will propose a remedy for U.S. vehicles affected by its emissions scandal when he meets with the Environmental Protection Agency on Wednesday in Washington, D.C.
Volkswagen must also launch a new branding campaign and invest in environmentally friendly vehicles, said Peter De Lorenzo, editor of Autoextremist.com. “I think they’re going to double down on technology,” he said.