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Volkswagen pulls name-change stunt after it backfires on social media

David Shepardson, Christoph Steitz and Jan Schwartz
·3 min read
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By David Shepardson, Christoph Steitz and Jan Schwartz

WASHINGTON (Reuters) -Volkswagen AG's U.S. unit apologized on Wednesday after a false statement it issued about a name change was widely slammed on social media.

The company acknowledged that the false announcement - claiming it would rename its U.S. operations as 'Voltswagen of America' - had "upset some people and we are sorry about any confusion this has caused."

The stunt, which came just ahead of April Fool's Day on the first of the month, when companies often release prank statements, was meant to call attention to its electric vehicle efforts, the carmaker said.

The statement was criticized on social media, with some commentators recalling the company's diesel-emissions scandal and years of misleading customers and regulators.

Automotive News, in a blog post titled "VW lied to sell diesels; now it lied to sell EVs," said the automaker "still seems to think lying to the public is an acceptable corporate strategy."

The initial statement outlining the name change, posted on its website and accompanied by tweets, was reported by Reuters and other outlets globally and included a detailed description of its purported rebranding efforts and new logos.

The company pulled it late on Tuesday.

"The renaming was designed to be an announcement in the spirit of April Fool's Day, highlighting the launch of the all-electric ID.4 SUV and signaling our commitment to bringing electric mobility to all," a VW U.S. spokesman said.

A Volkswagen spokesman in Germany called the rebranding a "nice idea" with a focus on marketing. Volkswagen Group of America CEO Scott Keogh did not respond to messages.

The incident marks the latest communication hiccup at the group, which made headlines last year when it withdrew and apologised for an advert posted on its official Instagram page for its Golf cars that it admitted was racist and insulting.

Still, at least one analyst wrote a research note praising the name change.

VW's preferred shares were flat on Wednesday after closing 4.7% higher on Tuesday, while common shares were down 1%, having closed 10.3% higher the previous day.

German financial watchdog BaFin had no immediate comment. The regulator said this month it was watching Volkswagen shares in a routine way following a recent rally.

Volkswagen, the world's second-largest carmaker, expects to double electric vehicle deliveries and boost profits for its core brand this year after stepping up its switch to fully electric vehicles in a bid to catch up with Tesla.

Some VW officials have expressed frustration that its significant U.S. EV efforts have not drawn as much attention as Tesla or General Motors.

The Volkswagen brand aims to invest 16 billion euros ($19 billion) in electrification and digitalization by 2025. It has committed to sell one million EVs worldwide by 2025.

Volkswagen in 2015 admitted to using illegal software to rig diesel engine tests in the United States, sparking Germany's biggest corporate crisis and costing the carmaker more than 32 billion euros in fines, refits and legal costs.

In 2017, VW pleaded guilty to fraud, obstruction of justice and making false statements as part of a $4.3 billion settlement reached with the U.S. Justice Department over the automaker's diesel emissions scandal.

($1 = 0.8519 euros)

(Reporting by David Shepardson; Additional reporting by Hans Seidenstuecker; Editing by Howard Goller, Raju Gopalakrishnan and Bernadette Baum)