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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.

McLaren F1 poaches Jost Capito from VW WRC

The executive shuffle continues at the McLaren Formula 1 team with news that Ron Dennis has lured Jost Capito away from his position as head of Volkswagen Motorsport. Capito will become the CEO of McLaren Racing, replacing Jonathan Neale who took the position on an interim basis at the beginning of 2014 to replace Martin Whitmarsh. Whitmarsh, who had been with McLaren for 24 years and spent five of them as F1 team principal, left the company after being moved out of the CEO position. Neale, on the other hand, who has been with McLaren Racing since 2001, is moving over to the newly created position of COO of the McLaren Technology Group. Capito left the Ford SVT division in 2012 to run VW Motorsport, and has spent the past three years shepherding the brand's World Rally Championship to three consecutive driver's and manufacturer's titles. Before that, his lengthy racing resume includes developing high-performance BMW engines, winning the Dakar Rally as a co-pilot, executive positions with Sauber in the early nineties, and managing Ford's WRC team. Dennis, who first approached Capito last summer, called him, "extremely impressive, competitive, and ambitious." The Woking team has some great parts, but it hasn't been able to make the most of them comprehensively since the end 2012 season. Autosport says that Capito has the ability to make the best pieces work together, which will probably be his biggest challenge at McLaren. Capito will remain at VW until a successor is found. News Source: The GuardianImage Credit: AP Photo/Lionel Cironneau Motorsports McLaren Volkswagen Racing Vehicles F1 jost capito

Audi buys Ballard fuel cell patents for $80 million

While some auto companies (e.g., Toyota and Hyundai) are giving away some hydrogen fuel cell patents, others are paying a pretty penny to gain access to the H2 tech. Audi announced today that it has purchased a suite of fuel-cell patent from Ballard Power Systems. The deal between Volkswagen Group and the Canadian fuel cell pioneer is worth over $80 million US. Unsurprisingly, the value of Ballard's stock shot up about a dollar (to $2.61 as of this writing) on the announcement. VW and Ballard will also extend their development agreement, originally scheduled to end in 2017, to March 2019, and possibly another two years after that. Thus far, the deal – which revolves around the "design and manufacture of next-generation fuel cell stacks" for VW's H2 demonstration program – and Ballard says it is a leader in "critical areas of fuel cell product design – including the membrane electrode assembly (MEA), plate and stack components – along with certain testing and integration work." At the LA Auto Show last fall, VW showed off a Golf SportWagen and a Passat with a hydrogen hybrid HyMotion powertrain as well as a Audi A7 Sportback H-Tron Quattro. Audi buys fuel-cell patents from Ballard Power Systems Development agreement with Ballard extended until 2019 Audi's Head of Development Prof. Hackenberg: "The entire VW Group will use these patents." Ingolstadt/Burnaby, February 11, 2015 – AUDI AG has acquired a package of patents relating to fuel-cell technology from Ballard Power Systems Inc. In addition, the Volkswagen Group has extended its cooperation with the Canadian clean energy company until 2019. The purchase of these patents will provide new impetus for the development of fuel-cell drive systems at Audi, VW and the Volkswagen Group. As explained by Prof. Dr. Ulrich Hackenberg, Member of the Board of Management for Technical Development at AUDI AG and responsible for the steering of the development departments of all brands in the VW Group: "Audi is acquiring these strategically important patents for the entire group and will make them available to all the brands. In this way, we are securing crucial expertise that will provide new impetus for the further development of this technology." Ballard Power Systems Inc. is based in Burnaby, Canada, and is one of the world's leading companies in the technology of proton exchange membrane fuel cells.