Volkswagen in the US earlier this week communicated that it plans to change its name to Voltswagen, a definite intent from the car maker that the present and future of mobility belongs to battery-powered vehicles. Widely reported across the world, the intent to change the name was regarded as a major development. Just that, well, it wasn't.
On Tuesday, the company confirmed that the communication was part of its pre-April Fool's Day joke. A marketing stunt too, perhaps? "Volkswagen of America will not be changing its name to Voltswagen," a statement attributed to a Volkswagen US spokesperson, read. "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."
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While it is not uncommon for big companies to try and create headlines through rather unconventional ways, analysts and industry experts tend to agree that a joke on changing names by a public company of Volkswagen's stature is rather strange. Associated Press quoted a professor at Duke University who teaches corporate and securities law, as highlighting the move as misinformation. "The whole market has gone crazy," James Cox reportedly said. "We need to throw a pretty clear line in the sand, I believe, about what is permissible and what isn’t permissible."
Another professor, Tim Calkins, was quoted in the same report as saying that such moves have the potential of harming press relations. "The problem is that in the short run, you can fool people, and it seems cute and entertaining. But in the long run, you really do need positive and good relations with the media. For a company that already has credibility problems, this is really a strange move," he said.
While the chances of a possible credibility problem may be an important thing, there are even more serious complications that may await Volkswagen. The company's shares had seen a 5% increase post the announcement of a possible name change. Now that it has been officially termed as part of a joke, the car maker may face action from US securities regulators. This is what had happened in the case of Tesla and its CEO Elon Musk when Musk had taken to Twitter to joke that he had secured funding to take the company private. Both Tesla and Musk were slapped hefty fines for this.
A part of what may have convinced Volkswagen to go down a rather 'funny' route is cues it possibly takes from Tesla. Tesla has an unconventional manner of doing business and has a massive cult following across the world. Musk himself has a mammoth fan following. In its bid to play catch up to Tesla, especially in the US EV market, Volkswagen has been accused of either falling short in its efforts or trying to ape the California-based company.
The social media community was even more scathing in its opinion about the name change, and the subsequent announcement about it being a joke.