The emissions scandal surrounding the battered car
manufacturer, Volkswagen, will hit such heights that the brand will be unlikely
to survive as it is today, it will have to change.
It’s been about ten days now since the use of a “defeat
device” by VW to cheat emissions tests around the work surfaced, in that time
we have learnt that over 11m vehicles are affected which in turn have been
spewing millions of tonnes of emissions and poisonous gases into the atmosphere.
Their CEO has already gone, and at the moment three other
senior executive are under investigation, all their brands have been implemented
and it will cost them £billions to sort out.
Not only will they have to recall all of their cars for
fixing, but they have fines coming out of their ears and VW owners are clamouring
for compensation.
Volkswagen had one of the strongest brands in the auto
industry before all this, so what is likely to happen to it?
The brand impact
Volkswagen were a trusted brand, but the admission that they
purposely cheated the emission tests to con the car industry and consumers will
hurt them badly, VW deliberately set out to break the law.
On a positive note, it looks like consumers still some faith
in the brand as retailers in the UK haven’t noticed any major dip in the public
looking to purchase the brand, although now we know for a fact that this isn't
just a US problem and we have 1.2m of these vehicles in the UK – this may
change.
But experts do expect sales to decline considerably.
So can Volkswagen survive?
Volkswagen has promised to spend at least £4.7bn to help
“restoring consumer trust” in the brands they control, my gut feeling is that
they need considerably more than this.
In a statement the brand said its “top priority” was to
avert damage to customers and it will inform the public constantly and
transparently on further progress. They
want to win back trust and credibility.
But whilst the Volkswagen brand is unlikely to die as a
result, it’s not impossible that it could disappear!
What is more likely is that the country could be
restructured and broken up, some of its brands could be sold off. The global fines could be anywhere between £15bn
and £25bn – selling off parts of the business could help the Group to recoup
much of that money.
It could turn into a case of not just protecting the brand,
but protecting the car business from going under!
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