Volkswagen's image in Malaysia

Volkswagen is a well known name in the automotive world being famous for the Beetle and the Golf. VW's presence in South East Asia was weak to say the least until 2007 when VW decided to embark on expanding its business into Malaysia. Having introduced a handful of models it gradually increased the model line up to match the market demand.

With each passing year, VW's sales volume grew and so did its reputation as a good alternative European car for buyers who were tired of driving Japanese or Korean cars but did not want to pay BMW, Audi or Mercedes prices. The strategy worked well until one Managing Director who was appointed to head the local operations decided to focus nearly all their efforts on sales volume rather than providing adequate after sales service. Naturally, selling a car would require sufficient after sales service to match. Not having enough service centre locations the back log of cars to service kept growing. This was not the only problem but the way the management only focused its efforts on sales.
The initial introduction of the 1.4TSI engine with the dry sump DSG transmission was good but problems soon started appearing and the management did not take it seriously to help customers facing the problems. As the number of problems grew the number of angry customers grew leading to a publicized demonstration in front of the VW building creating massive bad press for VW.
The news got around and the sales volume started to drop. The damage was done and VW management had no choice but to take damage control actions to protect its damaged reputation.

The fault was of course with the previous management that put little effort to support customer problems. When there is a problem, customers would expect full support from VW however, VW's approach was very sly and shifted the blame back to the customer which infuriated the customers more. There was also the ridiculous policy of voiding the warranty if the customer was late to service their car by a few days. Having insufficient service centres coupled with long queues it made it impossible for customers to service their cars according to the schedule.

With the miserable sales volume now, VW is desperate to fix their reputation. Many used car dealers now refuse to take trade in for VW cars and many sales centres are struggling to sell enough cars to survive. Despite changing their approach with the service, warranty and customer support, it will be a very long way before VW can repair its reputation. Too much damage has been done and it is unlikely that VW can achieve the sales volumes from 3 years ago in the near future.

Rebuilding the image and reputation is an incredibly difficult task!