Volkswagen of America on Tuesday reposted on its media site a press release ‘accidentally’ posted a month early on Monday announcing a new name for its US operations, Voltswagen of America, emphasising the automaker’s electric vehicle efforts, but a spokesman for the parent company in Germany last night confirmed suspicions the move was a joke.
The name change was originally intended as an early April Fools’ Day stunt to get people talking about VW’s ambitious electric car strategy as the company rolls out its first all-electric SUV, the ID. 4, in US dealerships, the spokesman told the Wall Street Journal which noted the problem for VW was that everyone took it seriously, creating confusion about the company’s intentions and moving the shares, putting VW’s communications team on the defensive.
“We didn’t mean to mislead anyone,” the Volkswagen spokesman in Wolfsburg told the Wall Street Journal. “The whole thing is just a marketing action to get people talking about the ID.4.”
The WSJ , citing VW officials in Germany, said the spoof began late on Monday when VW communications in the US published a draft of the press release on the company’s website and then quickly took it down. But they left the document online long enough to grab the attention of journalists and VW fans, sparking a flood of online news and tweets.
It appeared everyone in the US unit was on-message as trusted news organisations mined their VW contacts and were told the rebranding was genuine.
VW communications officials in the US declined to comment at the time.
As the WSJ also noted, VW’s US unit published the release in full again on Tuesday on the US media website, a move that suggested the name change was in fact real and would take effect as stated in the release in May.
The press release quoted Scott Keogh as president and CEO of Voltswagen of America saying: “We might be changing out our K for a T, but what we aren’t changing is this brand’s commitment to making best-in-class vehicles for drivers and people everywhere.”
Back in Germany, a VW official told the WSJ the name change shouldn’t be taken seriously.
“There will be no name change,” the official said.
But after it became clear the joke’s intended recipients were doing exactly that, officials in Germany scrambled to reach their colleagues at VW’s US headquarters in Herndon, Virginia, to pull the plug on the campaign, according to Wolfsburg officials speaking to the WSJ.
The WSJ said the second publication of the press release helped send VW shares 4.7% higher on the Frankfurt stock exchange, handily outperforming the broad Dax index of German blue-chip stocks. In the US, the company’s American depositary receipts rose as much as 12% Tuesday before sliding near the close after the company confirmed the name change was a joke, closing up 9%.
The paper noted securities laws require public companies to speak truthfully to the market. If a company makes a statement that is misleading, it can open the firm to claims of market manipulation or hurt investors who relied on the misstatement when they made trades.
Kyle DeYoung, a former SEC enforcement official and partner at the law firm Cadwalader, Wickersham & Taft, told the Wall Street Journal that, while there is a tradition of companies making April Fools’ Day announcements, usually they are so trivial or obviously a joke that they don’t move the company’s stock.
“I do think this is a bit of an unusual situation,” DeYoung told the WSJ. “I would not be surprised if the SEC had some questions about what was going on here and what Volkswagen was thinking.”
The SEC declined to comment to the WSJ on Volkswagen’s actions.
The WSJ noted that, in 2003, VW officials replaced dozens of road signs for the city of Wolfsburg with signs reading Golfsburg to celebrate the launch of the latest edition of its best selling model. The campaign roused attention around the world and spawned a collection of Golfsburg souvenirs.
Reuters reported VW had come under criticism on social media for its misleading Voltswagen news release with some commenters recalling the company’s diesel emissions scandal and years of misleading customers and regulators.
“Volkswagen of America will not be changing its name to Voltswagen. 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 US spokesman said in a statement cited by the news agency.
As of publication time, the US unit was still using ‘Voltswagen’ to promote the ID.4 on its vw.com website. A real name change would have incurred huge rebranding costs for the unit and its dealers, and possibly required already built cars to be rebadged.