SBS Analysis: VW Emissions Scandal

There is no doubt that the VW emissions scandal has rocked the automotive industry. Over 1 million car owners and cars have and will be affected in the UK alone. Almost 3 million in Germany. VW have announced plans to recall 8.5 million diesel powered cars across Europe.

We asked two of our lecturers their thoughts:

Dr Atul Shah:

At root the problem with VW is a breakdown in culture and ethics among the leaders and senior managers. This is the outcome of a world increasingly dominated by greed and finance.

volkswagen-factory-uaw-backpedals-on-chattanooga-----no-official-organizing-campaign-ddarcjhaRobert Price:

VW has lost a quarter of its market value, but the real test will be sales figures – a test, in many respects, of how consumers view such scandals and the extent to which they remain in the consumers’ minds. Business ethics is not just about what businesses do, and it is easy to blame businesses for unethical decisions, but what of consumer action? The market mechanism, through consumer action, can be more corrective and punishing than the words of commentators and politicians. Consumers, if they want business to behave in a more acceptable way which demonstrates greater moral rectitude then individuals should make and take different purchase decisions, ones that demand far more of not just businesses but also organisations across all sectors.

It is clear that there are trying times ahead for VW. The company have earmarked £4.8bn to cope with the momentous task of recalling vehicles and repairing the damage – both mechanical and reputational – but that might not be enough.

But in the same breath that we denounce VW for corrupting their data to sell more cars, we should consider that during September, VW new-car registrations continued to grow. Across the month, VW saw at 8.4% increase in registrations (representative of sales). We should keep a close eye on the months to come, but this data begs the questions: how much damage has the emissions scandal really done, and how long before it’s brushed under the carpet and forgotten?

References:

McHugh, J. (Oct 12 2015) ‘Volkswagen Diesel Scandal Update 2015: Affected Countries Are Largely In North America, Europe, But Asia Not Immune‘ International Business Times (URL accessed 17/10/15)

Ruddick, G. and Topham, G. (Oct 15 2015) ‘VW to recall 8.5m diesel cars across Europe‘ The Guardian (URL accessed 17/10/15)

Sylvers, E. (Oct 16 2015) ‘Volkswagen’s Sales Hold Up in Immediate Aftermath of Emissions Scandal‘ Wall Street Journal (URL accessed 17/10/15)

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