For major global brands, a good reputation is worth billions. In the case of VW, the huge scandal caused by the revelation of fraudulent practices aimed at manipulating emissions test is a major blow to its prestige and reputation. How long will it take to recover? Beyond the fines and penalties imposed on the company, how much will this hurt the brand? How long will take to re-establish its reputation as an automotive industry market leader?
“The chief executive of Volkswagen AG’s luxury brand Audi was arrested Monday in connection with an investigation of his role in the German car maker’s diesel emissions-cheating scandal.
The arrest, the first of a Volkswagen executive board member relating to the dieselgate scandal, comes a week after Munich prosecutors added Rupert Stadler to a list of suspects in a fraud investigation that is targeting around 20 people.
Last week, the Munich prosecutor’s office said that Mr. Stadler and another unnamed Audi executive were suspected of committing fraud and falsifying documents in connection with selling diesel vehicles with manipulated emissions software in European markets.”
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“Volkswagen admitted in 2015 to rigging nearly 11 million diesel-powered vehicles to cheat on emissions tests, including models made by Audi. In 2016, Audi was part of a broader settlement reached between Volkswagen and the U.S. government. Volkswagen pleaded guilty to defrauding the U.S. government and has incurred around $25 billion in penalties, fines, and compensation for customers.”
—The Wall Street Journal, June 18, 2018