Impact of the Scandal for Volkswagen Cheated

            It is important to know the fact that when Volkswagen was caught in this scandal in 2015, they were the 2^nd largest automobile company in the world in 2014 just behind Toyota Motors. When scandal was revealed and Volkswagen admitted the fact they actually knew about this cheating device installed in its engines; it was the time, when things started to get worst for company, and they had to face so many bad impacts both in terms of financial losses, penalties and bad reputation. Few Critical impacts with different aspects are given below:

        The first biggest impact was on sales of Volkswagen. The company earned bad reputation from the case, which made things worse for them, and after 2002, it was first time that the company was experiencing huge decline in their sales around the world. It was one of the huge impacts they had to face, along with a significant decrease in their shares as well. The company value in terms of its shares went down so quickly and company had to face a huge loss with regards to its market value (Mansouri 2016)

        The other impact of the scandal was on the environment. It was found out that vehicles with defeat devices were emitting 40 times more nitrogen oxide in the air from the given limit in the United States. The research has found out that nitrogen oxide can be a reason for many diseases such as cardiovascular, respiratory, heart diseases along with premature deaths. A rough estimate of the scandal was made that around sixty premature deaths would have been occurred due to increased emission level by Volkswagen vehicles (Mansouri 2016)

        The company had to recall a huge number of vehicles around the world including United States. It was said that company had to recall 500,000 cars from the U.S market, and 8.5m cars from Europe. It was estimated that recalls of vehicles would roughly increase the company’s costs up to €6.7bn (Hotten 2015)

        The costs related to the scandal in United States have been around $20 billion in terms of civil settlements and fines. The overall costs associated with 11 million vehicles with defeat devices was around 26 billion Euros. And in recent times, the company has agreed to pay $1.2 billion in Germany, where the fine was imposed by the German prosecutors (Bloomberg Associated Press 2018)

References of the Scandal for Volkswagen Cheated

Bloomberg Associated Press. 2018. Volkswagen agrees to pay US$1.2 billion fine for cheating on diesel emissions tests. Accessed December 1, 2018. https://www.scmp.com/news/world/europe/article/2150673/volkswagen-agrees-pay-us12-billion-fine-cheating-diesel-emissions.

Hotten, Russell. 2015. Volkswagen: The scandal explained. Accessed December 1, 2018. https://www.bbc.com/news/business-34324772.

Mansouri, Nazanin. 2016. "A Case Study of Volkswagen Unethical Practice in Diesel Emission Test." International Journal of Science and Engineering Applications 5 (4): 211-216.