Trust, once lost, can be difficult to restore, as Volkswagen has discovered since the US charged it last fall with emissions cheating. The carmaker’s sales are expected to fall 5 percent this year. But, it turns out, VW is not alone among global carmakers in the need to regain credibility with buyers.
Just this month, Japan’s Mitsubishi Motors admitted it had manipulated fuel-economy tests. French investigators raided the offices of the maker of Peugeot and Citroën cars over irregularities in their emissions. And German officials said General Motors, Mercedes-Benz owner Daimler, and VW will recall 630,000 diesel cars across Europe for “irregularities” about nitrogen oxide emissions.
In addition, the total number of total recalls in the United States hit a record high last year at 51.3 million vehicles, beating out the previous record in 2014. The biggest recall involved defective airbags make by Japan’s Takata Corp.
Obviously, trust in the automotive industry needs repair – especially as it moves toward driverless cars and more automated features. The industry must be as transparent as possible and cooperate with its many stakeholders.
All eyes are now on VW, Europe’s largest car manufacturer, and how well it can recover from its emissions scandal. So far it has worked out a tentative plan with US officials to make amends with American buyers of its diesel cars. And it plans to release a report from a US law firm investigating the causes of its diesel-emissions software manipulations. But it remains unclear how much change has occurred within its management.
One model for VW is the shakeup at General Motors following its faulty ignition switch scandal. Mary Barra, the new head of GM, has changed the company’s culture to be more open and accountable. The US government stated that GM took "took exemplary actions to demonstrate acceptance and acknowledgment for its conduct.”
Regulation of the industry is not enough as vehicle technology becomes more complex and parts are built around the world. Fines and recalls are proving inadequate. Regulators are being forced to rely more on self-certification by carmakers.
The industry must reach out to private groups to ensure compliance with domestic laws. In France, for example, major carmakers have worked with environmental groups to design new ways to measure car emissions in real-world situations, not only in a laboratory. “We have come up with a very strong vision that will give full transparency for our customers,” said Carlos Tavares, head of the French company PSA. “We want to demonstrate openness and confidence.”
The industry’s ability to restore trust need not take an overlong time. It only requires the right actions.