Volkswagen's biggest dealer said today the future of VW in America rests on what the world's biggest auto manufacturer does in the next few days and weeks to address charges that it rigged emission tests on its diesel engines to meet pollution standards the car engines would have otherwise violated.
"The Volkswagen brand is at risk," Mike Jackson, CEO of Auto Nation, told CNBC today. "How it develops depends very much on how they respond to the crisis in the next few days, weeks and months."
As VW board meets today at the company's corporate headquarters in Wolfsburg, Germany, Jackson said it is important that VW step up to the problem, address it and make what are likely to be costly changes for the company. VW directors are reportedly deciding whether or not to renew the contract of Volkswagen CEO Martin Winterkorn.
On Sunday, Winterkorn said he deeply regrets the current emissions cheating scandal and said everything was being done to fully clear up the case as quickly as possible.
"It is absolutely shocking and hard to get your head around," Jackson said in a televised interview on CNBC's Squawk Box. "If you look at the scale of the deception over six years, 11 million vehicles involved, the challenges from the regulators starting three years ago, already having one recall last year that didn't really resolve the issue — it all points to a systemic failure."
Jackson, whose company operates six Volkswagen dealerships and three Audi dealerships affected by last week's EPA citation against VW, said Volkswagen's reputation has been tarnished and it will take time to regain the trust of diesel buyers in the U.S. who often bought their vehicles because they thought they were being environmentally responsible.
"It's going to be a long journey to re-earn your trust," Jackson said.
Auto Nation and other VW and Audi dealers can't sell Volkswagen diesel cars on their lots. VW represents only about 1 percent of all sales at Auto Nation, which is the largest automobile dealership in the United States.
The diesel vehicles which EPA contends Volkswagen rigged emission testing equipment on include Jettas, 2009 to 2015; Jetta SportWagen TDI, 2009 to 2014; Beetle, 2012 to 2015; Beetle Convertible, 2013 to 2015; Audi A3, 2010 to 2015; Golf, 2010 to 2015; Golf SportWagen TDI, 2015; and Passat, 2012 to 2015.
Nearly one of every four Passats made at VW's Chattanooga factory this year were diesel models, according to the company.