I woke up this morning and my key fob started acting weird. Every key I would press, it would blink red instead of green. It would not unlock the car. When I opened the car with the key manually, it wouldn't start it either. There is nothing showing on the display. I've changed the battery on the fob already but that didn't help. Any ideas what could be the cause?
The fact that both the central locking doesn't work and the car doesn't start there is a problem with the immobiliser electronics in the actual vehicle rather than a problem with the key.
You haven't stated what year the car is but on VWs there is either a separate immobiliser module or the immobiliser is built into the Instrument Cluster and engine ECU.
I would suggest taking the vehicle to a good specialist auto electrician. If you take it to a dealer they will only replace electronic modules costing hundreds.
A specialist would be able to repair a module or reprogram a second hand unit.
Thing 1: The VW keyless entry system and the immobilizer are two separate systems with difference components in the key. The immobilizer is basically an RFID chip that the car is configured to recognize (you program the car to recognize its keys). The keyless entry system uses active components in the key and there is a song-and-dance that you do to get the car to recognize the fob after changing batteries or if the phase of the moon and the music that was playing when you tried the fob turned out to be wrong – in other words, sometimes for no good reason that I know of you have to reacquaint the car with the key to get the keyless entry system working again.
Thing 2: The way the VW immobilizer works you get to start the car even if the immobilizer system doesn't recognize the key – but it will only run for about 30 seconds. You may also be able to see an indication on the instrument cluster that the immobilizer is unhappy with the key.
So given the above, I don't think that the problem stems from the key. If there is really "nothing on the display" I'd start by confirming that the battery is charged and in good health.