VW's Premature April Fools Prank to Change Company Name to 'Voltswagen' Backfires

[cfm56d7b]

Clever, directed marketing can lead to increase sales. Case in point: VW UnPimp My Ride GTI commercials. Classic and timeless.

Voltswagen? Will defer any and all opinions until sales statistics become available.

[Germanauto]

VW has been compensating REALLY hard for dieselgate.

[Tacoma]

According to driving.ca:

"[UPDATE 03/30/2020: The Wall Street Journal, Reuters, and several other sources are now saying sources inside VW are telling them the rebranding announcement is in fact an April Fools’ joke that launched early, part of a U.S. publicity campaign to stir up interest in its new electric models. Our original report from March 29 continues below. Look forward to more coverage once this update is clarified by the company itself.]"

Edit: Here's the Reuters article: No VW U.S. name change as sources say fake release was a marketing stunt

[cfm56d7b]

Originally Posted by Tacoma

According to driving.ca:

"[UPDATE 03/30/2020: The Wall Street Journal, Reuters, and several other sources are now saying sources inside VW are telling them the rebranding announcement is in fact an April Fools’ joke that launched early, part of a U.S. publicity campaign to stir up interest in its new electric models. Our original report from March 29 continues below. Look forward to more coverage once this update is clarified by the company itself.]"

Edit: Here's the Reuters article: No VW U.S. name change as sources say fake release was a marketing stunt

There are so many other ways to educate car buyers about new products ... one can only question the wisdom of a fake press release. Even "there is no such thing as a bad publicity" approach has limits.

[stein_325i]

Very interesting article from Road and Track regarding VW's electrification efforts in the US.

Forget "Voltswagen," VW's Real Problem Is Misunderstanding the U.S. Market

Originally Posted by Road & Track

VW has seemingly tried everything to crack the U.S. market—except building a segment-leading car.

The first thing to understand is that Volkswagen's best year on the U.S. market was around 50 years ago. In 1970, VW had roughly 5 percent of the U.S. market share, more than double its 2.21-percent slice of the pie in 2020, per sales tracking firm GoodCarBadCar. In 2012, VW's market share reached a recent high of 3.04 percent, before declining in 2013, 2014, 2015, and 2016. The post-Dieselgate sales slump was real, but it was also simply a continuation of a pattern already in motion...

But even before the emissions cheating scandal broke, the diesel-heavy plan was falling flat. As U.S. fuel prices came back down, VW was forced to confront the unique realities of this market. Diesel passenger cars have never represented a large portion of our market, in part because, unlike their European counterparts, U.S. regulators have never incentivized diesel over gas. Absent those advantages, even cheating diesels—which were more affordably priced than competing automakers' oil-burners, thanks to missing emissions controls that turned out to be necessary to meet regulations—struggled to convert U.S. buyers...

Volkswagen began to design models specifically with the U.S. market in mind, often built in North American factories. First came the 2011 Jetta, sold worldwide but enlarged to appeal to Americans. Next was the Passat, which was split into distinct U.S. and European models. Both showed strong growth here: In 2012, Passat sales grew by more than 100,000 compared to the year before. Things were looking up.

But by chasing our market with more-affordable offerings, VW abandoned most of the premium, Germanic quality that had long set it apart. More worryingly, the segments where VW was strongest—compact hatchbacks and small sedans—started shrinking. After a strong few years, Passat, Golf, and Jetta sales all declined. Then, Dieselgate hit, accelerating the freefall. Suddenly, the company had billions of dollars in fines to settle. In the middle of a far-reaching U.S. expansion effort, VW could no longer afford to burn cash.

The automaker leaned into more profitable efforts, like enlarging the once-compact Tiguan and launching the three-row Atlas, both vehicles aimed squarely at America's SUV-heavy tastes. Both have relatively strong sales, but neither vehicle is segment-defining. Unlike the Hyundai Palisade or Kia Telluride, there is no wait-list for VW's SUVs. They also don't represent the brand particularly well. VW, long known as the purveyor of practical people's economy cars, now makes most of its U.S. dollars on three-row utility vehicles, while striking German-built Arteons sit unsold and the bread-and-butter Golf departs the U.S. market for good...

I suspect Volkswagen—sorry, Voltswagen—is actually serious. I just don't think seriousness corresponds to competency. Because despite all of the hype, the name change, and the comparisons to the Beetle, the ID.4 seems absolutely average among all of the EVs on sale today. Its battery range is typical; it looks anonymous; it's no more affordable or compellingly equipped than the EVs that have come before it. I mean, if this is the People's EV, you can see why The People might stick with gasoline.

There's no inherent reason why we should care about the ID.4 any more than the Chevy Bolt, the Hyundai Kona EV, the Nissan Leaf, or even the Tesla Model 3. We've seen no proof of any VW tech advantage or tuning supremacy in the EV space. So when the company proclaims its own seriousness about electrification, it feels like a claim of importance through birthright. Of course, if you start with the base assumption that VW is a great and momentous brand, you would assume this move is great and momentous and worthy of a rebrand. But the focus on electrification itself doesn't matter unless it leads to amazing vehicles. And even if the Voltswagen name turns out to be an April Fool's Day joke gone wrong(as the Wall Street Journal suggests), it exposes that VW is more interested in hyping up its passable EV than genuinely disrupting the entrenched segment leaders.

That's the core problem with Volkswagen in America. The company is an underdog that perceives itself as an established winner. Great products come from teams that have something to prove. The Lexus LS, the Tesla Model S, the Kia Telluride—all were designed by automakers seeking to establish (or revamp) a reputation, outsiders breaking in. The only proven way to change minds is to build a product so compelling that it cannot be ignored. VW has been resting on its laurels long enough. If the company wants to win America, it has to be with a winning product. The sooner Volkswagen, or Voltswagen, or whoever, realizes that, the better.

[mkoesel]

So Road & Track was in on it, then? It was their article claiming to have official confirmation that gave the whole thing any credence.

Unfortunately for VW, what’s not a joke is the raft of new electric SUVs arriving to challenge the ID4. And it’s looks like the ID4 may be in for a rough go.

[5.M0NSTER]

So VW does in fact have a sense of humor?!

[stein_325i]

Who would’ve guessed a PR stunt based on lies could backfire for a company trying to regain people’s trust?

In the Meme-Stock Era, Even Bad Voltswagen Jokes Are Worth Billions

Originally Posted by Bloomberg

This week Volkswagen AG provided a lesson in just how difficult it is to “be Elon.” VW’s U.S. arm claimed it was changing its corporate name to “Voltswagen,” denied it was an April Fools’ Day joke, then admitted that, um, it was in fact an April Fools’ Day joke gone wrong.

The German giant has been riding a wave of investor excitement about its electric-car strategy. Thanks in part to some clever social media and marketing, VW seemed to have cracked Musk’s knack for share-price boosting publicity. The more frequently traded VW preference shares are close to a six-year high.

News of the purported name change helped VW’s American depositary receipts — the ones favored by U.S. retail investors — to climb as much as 12.5% on Tuesday. Which is where this cringeworthy incident goes from being a disastrous attempt at humor to something potentially more serious.

I’m not suggesting VW’s gaffe was an attempt to manipulate the stock market and I doubt the U.S. Securities and Exchange Commission would view it like that. It’s a reminder, however, that we now live in the meme-stock age where even bad jokes can add or subtract billions of dollars in market value. It’s a minefield for corporate executives to navigate.

In an era of fake news, the lighthearted April Fools’ Day tradition of companies spinning tall tales has lost its charm. Reporters from trusted outlets such as the Associated Press are furious at having been lied to by VW and made to look foolish. Unlike Tesla, which has long shunned advertising, VW has a massive marketing budget. It should be able to do better than this. A company that misled customers about its vehicles' diesel emissions needs to tread especially carefully.

It’s easy to say VW should just focus on building cars and leave the jokes to people who are actually funny. The company has an ambitious and convincing electric-vehicle plan and may soon leapfrog Tesla to become the world’s largest battery-vehicle manufacturer. But being ploddingly German is an impediment in today’s stock market. Despite being one of the planet’s richest people, Musk’s counterculture savvy and feisty irreverence has made him a hero for Redditors.

Tesla has weaponized its soaring share price to raise billions of dollars in cheap funding. That money pays for new factories and products and is a threat to established carmakers. VW must fund its investments via the cash it generates. Even after this year’s blistering run its share price is less than 10 times the value of its earnings. It would be self-defeating if VW didn’t try to be a bit “cooler.”

There’s also a double-standard in play. We expect VW to be reliable, while Tesla gets to be quirky. Indeed, Musk gets away with things that others wouldn’t. For years Tesla has marketed an autopilot system called “Full Self Driving” that can’t yet drive entirely by itself — the timeline for when it will be able to do that always seems to be just around the corner.

And in 2018 Musk claimed on Twitter that he’d secured funding to take Tesla private, when in fact he hadn’t. Musk ended up paying a small fine and stepped down as chairman. But he remains as outlandish as ever, recently appointing himself Technoking of the company and his chief financial officer Master of Coin because the latter’s in charge of managing the $1.5 billion of Bitcoin Tesla purchased. Get it? None of this is a joke.

Following VW’s successful “Power Day” — a straight copy of Musk’s “Battery Day” event — I quipped that it wouldn’t be long before VW boss Herbert Diess was appointed “TechnoKaiser.” Finance blog Zerohedge came up with the better punchline: “VW should go full Elon and file an 8K saying its new title is Voltswagen,” it tweeted. VW appears to have taken that tongue-in-cheek advice rather too literally. More fool them.

[stein_325i]

Originally Posted by 5.M0NSTER

So VW does in fact have a sense of humor?!

VW's sense of humor was fitted with a defeat device

[mkoesel]

Originally Posted by stein_325i

Who would’ve guessed a PR stunt based on lies could backfire for a company trying to regain people’s trust?

In the Meme-Stock Era, Even Bad Voltswagen Jokes Are Worth Billions

This quote from the article says it all:

In an era of fake news, the lighthearted April Fools’ Day tradition of companies spinning tall tales has lost its charm. Reporters from trusted outlets such as the Associated Press are furious at having been lied to by VW and made to look foolish. Unlike Tesla, which has long shunned advertising, VW has a massive marketing budget. It should be able to do better than this. A company that misled customers about its vehicles' diesel emissions needs to tread especially carefully.

Note to VW, if you play the April Fool's card before April 1st, no one is going to get it. Don't try to fix it by doubling down on the deception.

Maybe VW will try to fix this once and for all by reneging again tomorrow: "Just kidding guys, we really are changing the name!" and later in the day, "Psych! Ha-ha! We got you again!".

[stein_325i]

[jmack]

What's going on with German auto marketing and social media? BMW and VW duking it out for most embarrassing marketing this year.

[stein_325i]

Originally Posted by jmack

What's going on with German auto marketing and social media? BMW and VW duking it out for most embarrassing marketing this year.

BMW and VW's marketing team in 2021

[David70]

I think it was a good idea and the people that got upset by it need to lighten up. They come out with a stupid idea a couple of days before April 1st and "geniuses" are now upset they were duped.

Anyone that got their feelings hurt or invested additional money in VW stock because it was going to be named Voltswagen are idiots.

Likely still accomplished their goal even if news outlets are upset.

[GrussGott]

Originally Posted by David70

I think it was a good idea and the people that got upset by it need to lighten up. They come out with a stupid idea a couple of days before April 1st and "geniuses" are now upset they were duped.

Anyone that got their feelings hurt or invested additional money in VW stock because it was going to be named Voltswagen are idiots.

Likely still accomplished their goal even if news outlets are upset.

If that were the story, I'd agree, but that's not the story; rather the story came out, then the actual VW corp press office confirmed the story was true.

Nobody should lighten up about a publicly traded company's press office lying to the public & investors ... which is why the SEC could investigate for stock manipulation: The stock moved on news the publicly traded company confirmed. People may have lost money, potentially a lot. Not a "oh ha ha" thing, possibly (probably) illegal.


It's like if I worked for Fidelity, called you and told you your 401k balance was $0 - and then you called back and got someone else who said, yeah, you've got $0. Then tomorrow, "ha ha, it's not $0!". Would your feelings be hurt or would you be pissed you were lied to, especially about your investments by an institution?

[stein_325i]

Volkswagen could end up in hot water with the SEC over its 'Voltswagen' marketing stunt

Originally Posted by CNN Business

Volkswagen of America says its "Voltswagen" name change was merely a joke "in the spirit of April Fools' Day" to promote a new electric car. But even if it was meant as a lighthearted marketing gag, the move could land the carmaker in some serious trouble.

The situation may have put the company at risk of running afoul of US securities law by wading into the murky waters of potentially misleading investors.

"This is not the sort of thing that a responsible global company should be doing," said Charles Whitehead, Myron C. Taylor Alumni Professor of Business Law at Cornell Law School...

But here's the thing: People took the first, untrue statement about the name change seriously.
Wall Street analysts even released guidance about what such a change might mean for the carmaker's strategic direction. Wedbush analyst Dan Ives said in a note to investors Tuesday morning that such a name change "underscores VW's clear commitment to its EV brand," and went on to detail the market opportunity for electric vehicles in the United States, Europe and China in the coming years.

Volkswagen is indeed investing heavily in electric vehicles, but confusion over the name change could prompt scrutiny from the Securities and Exchange Commission or litigation from investors who feel misled by the joke. The Securities Exchange Act prohibits companies from making false or misleading statements to investors.

"It's a great illustration of the power of the media and the need to be really careful about what you say because you can never know what will or won't move a market," said Jonathan Richman, a partner at law firm Proskauer. "From Volkswagen's point of view, this was supposed to be amusing, but one person's amusement might be another person's profit or loss."

Quipping about the status of a business that Volkswagen is positioning as more environmentally friendly also could irk investors, especially in light of the 2015 diesel emissions scandal the company has been trying to put behind it.

"Will the SEC inquire? Well, of course they will," Whitehead said. "It's gotten enough publicity and people are concerned about it and there are issues about whether or not companies should be doing this that I'm sure [the SEC is] going to make a phone call."

A representative from Volkswagen's headquarters said Wednesday afternoon the company had not been contacted by the SEC. The agency declined to comment on the matter.

There is precedent for the SEC taking action against cheeky statements regarding big companies. In 2018, Tesla CEO Elon Musk settled with the SEC for $20 million after the agency said his tweet about securing funding to take the company private at $420 a share — an apparent joke about weed — misled investors.

If the SEC were to investigate the "Voltswagen" stunt, Whitehead said, it would likely look at whether the statement was intended to manipulate the company's stock price or if shareholders would consider a name change (or the fact that the name change was a joke) to be material information. Arguing either claim could be tricky.

On Tuesday, following the name change statement, Volkswagen's ADR stock briefly jumped almost 10%, before closing nearly flat (the company's shares have, however, been trending steadily upward in recent months).

"I don't know that simply changing the name, or not changing the name for that matter, is going to be considered material ... I don't think it rises to that level," Whitehead said. "These are all kind of gray areas, which is why a responsible company just doesn't go down this path."
Richman added: "To prove a claim you have to prove intent, meaning that there was a conscious or at least a grossly reckless disregard of the truth here. I would imagine that if this really was intended as an April Fools' joke, it's going to be very difficult to prove that Volkswagen intended to deceive the market."

For its part, Volkswagen of America said it "cannot see any influence on the stock market price as a result of the advertising campaign."

"This was not and is not the aim of the campaign," Volkswagen of America said in a Wednesday statement to CNN Business. "It is a publicity measure in the context of the market launch of the ID.4 and the e-mobility push in the USA."

A statement from Volkswagen's headquarters earlier Wednesday said that the company has also issued April Fools' Day press releases in the past: In 2003, it temporarily renamed the German town of Wolfsburg, where it's headquartered, to "Golfburg" to promote the release of the Golf. And numerous other corporations have carried out April Fools' pranks in the past, too, without raising the eyebrows of securities regulators.

But in the case of the "Voltswagen" statement, "there was nothing to indicate ... that — nudge, nudge, wink, wink — this is really a joke, unlike the other gags that have been out there," Whitehead said.

In fact, the company included some pretty specific details in the name change statement about what the shift would mean, including that it would use "Voltswagen" on the chrome badges on the backs of its electric vehicle. (It's not.) And it didn't help that the statement announcing the purported name change included no reference to April Fools' Day — and it landed two days before the holiday.

As for the timing of the statement, Volkswagen of America said it "had a whole social media and marketing campaign about our e-mobility plans that was due to roll out" between the time of the name change statement and April 1, "when we were due to announce that it was a joke."
Volkswagen's (VLKPF) stock fell nearly 4% on Wednesday in the wake of news of the debacle. And that's no joke.

[GrussGott]

Originally Posted by stein_325i

Volkswagen could end up in hot water with the SEC over its 'Voltswagen' marketing stunt

well, yeah!

It ain't no joke when a publicly traded company falsely confirms news ... at that point it's stock manipulation.

Best Example:

later claimed to be a 4/20 weed joke ... but here's the thing: EVEN THEN, the $TLSA corp press office didn't confirm it!

like GEEZUS VW, that's so ridiculously stupid ...

[nick3753]

Maybe Diesel-gate was an April fools joke...

[David70]

Originally Posted by GrussGott

If that were the story, I'd agree, but that's not the story; rather the story came out, then the actual VW corp press office confirmed the story was true.

Nobody should lighten up about a publicly traded company's press office lying to the public & investors ... which is why the SEC could investigate for stock manipulation: The stock moved on news the publicly traded company confirmed. People may have lost money, potentially a lot. Not a "oh ha ha" thing, possibly (probably) illegal.


It's like if I worked for Fidelity, called you and told you your 401k balance was $0 - and then you called back and got someone else who said, yeah, you've got $0. Then tomorrow, "ha ha, it's not $0!". Would your feelings be hurt or would you be pissed you were lied to, especially about your investments by an institution?

Trying to make this similar to Fidelity calling you and telling you your 401k balance is 0 is a dumb analogy. They aren't even in the same.

I can't believe anyone was stupid enough to believe VW was changing their name just in the U.S. and as someone pointed out a quick investigation pointed out they hadn't registered the name.

Originally Posted by GrussGott

well, yeah!

It ain't no joke when a publicly traded company falsely confirms news ... at that point it's stock manipulation.

Best Example:

later claimed to be a 4/20 weed joke ... but here's the thing: EVEN THEN, the $TLSA corp press office didn't confirm it!

like GEEZUS VW, that's so ridiculously stupid ...

Again, you must be able to come up with something closer. VW and a name change (stupid name, days before 4/1 and just in the U.S.) to Musk and trying to sell the company? Since the beginning of Tesla people have speculated that they will eventually be sold. The idea that he had a deal worked out was far from funny and investors who had to assume there was a chance it was real. Maybe try again as I think you are 0 for 2 on your analogies.

[mkoesel]

Originally Posted by David70

I can't believe anyone was stupid enough to believe VW was changing their name just in the U.S. and as someone pointed out a quick investigation pointed out they hadn't registered the name.

That is overly harsh in my book.

As has been mentioned, media outlets attempted due diligence. They were skeptical - many very skeptical, I'm sure - just as most of us were. They attempted to get clarification from VW and were lied to again.

Also, would you believe that a corporate entity would announce a brand name without securing a trademark? It has happened, and on more than one occasion to my recollection (Ford and Microsoft come to mind). So that cannot be used as a benchmark for validation of the claim.

Finally, as stein_325i pointed out, IHOP actually *did* change their name to IHOb, so there is legitimate precedent for this type of marketing.

You're certainly entitled to your opinion, but to me, it typically does not come off particularly credible to come along after the fact and call lots of people "stupid" - many of whom we know are absolutely not that. I'm sure you are a clever individual who is all but completely immune to being duped or misled, and I give you kudos for you being so gifted. But for most of the rest of us, we recognize the poor judgment that went into this ruse and can empathize with those who felt some degree of betrayal.

[stein_325i]

Originally Posted by David70

I can't believe anyone was stupid enough to believe VW was changing their name just in the U.S. and as someone pointed out a quick investigation pointed out they hadn't registered the name.

At first, many didn't believe it, but VW had tried everything to convince people otherwise. Had this come out on April Fools day, everyone would have laughed, but you can't have an April Fools Joke in March.

Many had reservations about the truth behind the statements of VW's intentions upon the initial leaks. However it was VW themselves who confirmed these lies and said it was not a rumor. Even the news sources that reported the initial leaks made sure to mention their disbelief before VW's own PR representatives (not just one, multiple) had confirmed and purposely mislead the press into thinking the name change was real. They supported the lies with false documentation such as a full press release with official company statements from even the CEO, all to get the stories published. They had intentionally hoaxed the media. This wasn't just a rumor that people could debate but official company statements and documents.

While the news broke a few days before April Fools Day, VW had once again lied and assured the press that this was indeed not an April Fools Day prank despite suspicions.

Originally Posted by Roadshow

On two separate occasions that day, Roadshow spoke with Volkswagen representatives to confirm its authenticity and received assurance this was no piece of fake news. Indeed, we learned it was legitimate, and published the story. Confirmations from numerous other media outlets grew in tandem.

Originally Posted by Associated Press

"The Associated Press was repeatedly assured by Volkswagen that its U.S. subsidiary planned a name change, and reported that information, which we now know to be false," company spokeswoman Lauren Easton said. "We have corrected our story and published a new one based on the company's admission. This and any deliberate release of false information hurts accurate journalism and the public good."

The AP wrote a story about it Monday after its reporter was assured by Mark Gillies, a company spokesman in the United States, that it was serious, Easton said.

It was a similar story at USA Today, where a reporter specifically asked if it was a joke and was told "no," said the newspaper's spokeswoman, Chrissy Terrell.

"The company used this fake announcement as a way to manipulate respected reporters from trusted news outlets to get attention for their marketing campaign," she said. "We are disheartened that the company would choose this type of disingenuous marketing."

With VW confirming the news themselves to respected and large and popular news sources like USA Today, Associated Press and CNN, etc., its hard to not believe its true when word comes straight from the billion-dollar company's mouthpiece with assurances to it not being a joke. The press is normally lead to believe that a company's PR team is to be truthful and sincere as they aren't just random people but representatives of a large company with official information.

[5.M0NSTER]

Wow, a lot of people had their panties up in a bunch about this.

This should only effect you if you have VW stock. Otherwise who cares?? And we say that Germans don’t have a sense of humor? That only works when you can take a joke.