The scandal caused the company’s share price to drop; at least eleven million vehicles have been recalled in the U.K. and the U.S. department of justice has launched a criminal investigation into the company. The VW brand which has always been associated with German prowess, efficiency and reliability has been severely dented by the scandal.
Mark Smythe, motoring editor at Business Day believes that for now the impact on the brand is largely being felt overseas.
“Volkswagen will feel the impact the most in countries like the United States, where consumers have only recently started to take to its diesel models in particular and will feel aggrieved that they were lied to. Sales are currently halted but it will be the trust factor that will cause the most damage.”
The trust factor is the reason why consumers pay slightly more for VW brands. And as Damien McGuiness points out “Made in Germany’ is supposed to be a quality tested brand worth paying money for”. The German car industry employs more than 750 000 people and is a major source of export income. And that’s why within hours of this staggering revelation, VW lost U.S.$16.9 billion in market value.
In South Africa VW is one of the leading brands in the country. Last year it came second to Toyota in vehicle sales. Smythe says its too early to say whether the scandal will have an impact on local sales.
“South African consumers are also less concerned with emissions, in part because our emission standards are considerably lower than those in the US and the rest of the world and also because we do not have the incentives to buy based on emissions that developed nations have. If anything, and given that South Africa is hosting the second international EcoMobility Festival in October, the scandal could even turn the spotlight onto the issue of emissions standards in the country.”
This info graphic demonstrates the scale of the scandal.
But whether this will be enough to restore the brand to its former glory, remains to be
Images: VW Global Media