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March 18, 2003

USA: Volkswagen ignition coil replacements could cost $US83 million in US alone – report

Volkswagen of America is still struggling to calm angry owners and nervous dealers over an ignition coil problem that could affect over half a million Volkswagen and Audi cars in the United States and cost their maker $US83 million, the New York Times (NYT) reported.

By bcusack

Volkswagen of America is still struggling to calm angry owners and nervous dealers over an ignition coil problem that could affect over half a million Volkswagen and Audi cars in the United States and cost their maker $US83 million, the New York Times (NYT) reported.

The NYT said the problem has been aggravated by Volkswagen’s initial inability to replace all the coils on the cars instead of just the coils that failed. The affected cars have at least four coils, and some customers have had to return to their dealers three or four times — sometimes waiting weeks for each coil replacement. The failure of a coil causes a loss of power, the paper said.

According to the New York Times, as Volkswagen built up a supply of new coils, it changed the replacement policy, telling dealers to replace all coils on the second coil failure. Last week, the paper said, VW told dealers they could replace all coils on the first coil failure, but only if the dealers had sufficient replacement coils in stock.

Volkswagen of America spokesman Steve Keyes told the NYT that dealers are receiving shipments of new coils weekly but, if more coils fail than expected, dealers may not have enough new coils to replace all coils upon the first failure. If that happens, the customer could wait to bring in the car or could leave the car at the dealer until the coils arrive, and the dealer will provide alternative transport.

Keyes told the newspaper that Volkswagen wants to replace all coils on potentially affected vehicles — and may be able to do so by late May or early June — but must also keep enough coils for cars currently being built.

Some dealers are expecting a decline in business based on the irate reactions of owners so far, the NYT said.

Worried about the impact, Volkswagen’s National Dealer Council has asked the company to give current owners a $1,000 “loyalty coupon” for the future purchase of an Audi or Volkswagen but VW declined because of the cost, the paper added.

“We are trying to take care of our customers by replacing their parts and making sure they have loaner cars,” Audi spokeswoman Jennifer Cortez told the NYT.

Citing analysis by Automotive News, the New York Times said the cost of replacing all the coils on the potentially affected cars in the United States alone could be $US83 million.

Volkswagen and Audi have been consistently weak in customer satisfaction with dealer service, according to surveys by JD Power & Associates, the NYT noted.
JD Power executive director of automotive quality and customer satisfaction research Joe Ivers told the NYT that customers are complaining mainly about an inability to get quick service appointments.

The ignition coil problem could make things worse Ivers added, telling the newspaper: “The reason it matters, of course is that many customers will vote with their feet.”

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