Volkswagen Seeks To Guarantee Diesel Car Value With Buy Back Program To Dealers

Volkswagen of America, seeking to contain the damage from its emissions scandal, will offer to buy back some used diesel vehicles from its U.S. dealers at pre-crisis prices, Automotive News has learned.

According to three dealers briefed on the plan, VW will guarantee the value of certified pre-owned and other used VWs with 2.0-liter diesel engines containing the illegal emissions software in dealer inventory, at prices seen before Sept. 18, when the EPA announced VW’s violations. If any of those vehicles stay in dealer inventory for 60 days or longer, VW will offer to buy them back from dealers.

The program will roll out in three phases, according to an Oct. 29 memo to dealers from Volkswagen of America COO Mark McNabb, starting with an inventory of diesel vehicles on dealer lots to help VW determine which ones are eligible for the program. That step is expected to be completed by Nov. 13. VW will detail the next phases of the program over the next two weeks, according to the memo.

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PUGPROUD - 10/30/2015 3:06:44 PM

+3 Boost

This is like a snow ball rolling down hill...it keeps getting bigger and bigger. While VW is trying to get out in front of it (consumer program in early Nov) the damage will end up being worse than they could ever imagine.

mre30 - 10/30/2015 5:06:15 PM

0 Boost

Cool - VW is taking a page out of the Tesla handbook and is propping up the residual value of their diesel used cars!

This is a good solution. There is also probably some loophole where VW can re-export them as used cars (they're made in Mexico) to other markets and maintain their margin.

As a CPA, I'm sure there is a creative accounting solution to this problem.

atc98092 - 10/30/2015 7:39:07 PM

+3 Boost

OK, taking care of the dealers. Now how about us owners?

MDarringer - 10/30/2015 11:40:46 PM

0 Boost

VW is stunningly anti-consumer/anti-owner as their default. VW needs to prop up dealers because even before dieselgate, the profit in a Porsche/Audi/VW dealer was in Porsche and Audi, but all too often not VW. VW has to see that they are in deep danger of losing a major portion of their dealers.

mre30 - 10/31/2015 11:25:47 AM

+2 Boost

There is now even more reason that VW should break itself up into Porsche/Audi/Bentely and an "econo" division consisting of VW, Skoda, and Seat.

The VW division will basically become like Renault and Peugeot- a subsidized, nationalized car company that is not viable in the US, to Darringer's observation.

I think VW is done in the US - due to it being a slave to the German government and German labor laws. Its basically run by the German labor union. The don't call VW the "people's car" for nothing.

MDarringer - 10/30/2015 11:36:45 PM

0 Boost

If the cars are new and unsold, VW can sell them as new assuming they can find a market.

PUGPROUD - 10/31/2015 5:32:54 AM

+1 Boost

Years ago various major companies in various industries would off load products having a problem in major markets (regulatory, FDA, quality, etc, etc) into smaller third world markets to cut their losses. There are many reasons legally and otherwise why this cannot be done today. Any steps VW takes to sell any suspect or fixed models from one market to another will be expensive and heavily scrutinized.

jameswisrik - 11/2/2015 11:39:55 PM

+2 Boost

http://news.yahoo.com/us-says-vw-violated-emission-rules-larger-engines-181728635.html