VW emissions crisis puts global car industry in the dock

The Volkswagen ’emissions crisis’ gets worse and worse for the German car giant, with its North American head admitting publicly it “screwed up” and a supervisory board meeting today – which will probably result in the exit of CEO Martin Winterkorn.

Fines in the US and elsewhere will run into billions ($11.6bn in the US alone has been mooted) and sales will be hammered.

The company now has to decide what to do about its marketing platform, a dilemma crystallised by this ad that ran in the Emmys earlier this week. It features Kermit and Miss Piggy on the timely theme of “it’s not that easy being green.”

“It is now” says a smug Audi executive (Audi is owned by VW) showing off a new Audi hybrid.

Actually it will be nigh on impossible, for a few months at least. VW’s agencies, including DDB, Deutsch LA and Audi’s BBH in the UK, will be hunkering down with ashen-faced VW executives to decide what the hell they should do.

Fight back with a ‘mea culpa’ campaign? Try to maintain as dignified a silence as they can? It’s an impossible dilemmma, akin to that of BP after the Deepwater Horizon disaster in 2010 (although people died in that). Deepwater Horizon has so far cost BP $54bn. Some VW executives could also be liable for criminal charges.

It will be interesting to see how VW’s many competitors respond. They will gain market share anyway unless – and there’s a real chance of this – they too are found to have cheated on emissions data in the flurry of investigations that have already started. Shares of all the big car makers fell in the wake of the VW revelations (VW fell nearly 20 per cent in a day). So the experts think, or fear, that VW isn’t the only offender.

So it’s not just a crisis of credibility for VW but the whole car industry.

One Comment

  1. They are going to have to do a lot better than the CEO’s: “We screwed up.”
    Screwed up?? Good one. Try criminal dishonesty.
    There will be court cases for years…not just all the regulatory body stuff and multi-billion dollar fines but imagine you”d bought a VW recently based on its amazing emission levels.
    Class action in the post.

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