VOLKSWAGEN AG AFTERMATH

VOLKSWAGEN AG AFTERMATH

The Volkswagen emissions debacle is undoubtedly the greatest corporate catastrophe since the global financial crisis, and that even includes the BP oil spill of 2010.  It has been nicknames the "Diesel Gate" scandal and is the greatest controversy the carmaker experienced in its 78 year history. VW  is currently the largest car manufacturer in the world and it is no exaggeration to say that the company is in mortal danger. It is very likely that the VW group can survive the financial knock of the scandal but whether or not it can recover from the reputational damage it has suffered is extremely uncertain. The news of Volkswagen AG cheating in the global vehicle market space had a huge impact on its stock value / share price. Since December of 2014 Volkswagen's stock value / share price had steadily increased from €155 to as much as €247.55 depicting an average of €195.63. When the news of its impropriety broke, the stock value / share price plummeted and by Friday 2nd Oct 2015, it reached the all time low of €101,15 and is decreasing even further. Today  some 13 days later Volkswagen's share value has dropped to as little as €90.88, the same level it was at in September of 2011, a whole 5 years ago.  Just two days of down trading wiped out €25billion in VW market capital, placing it in an existence-threatening crises.

Emission Cheaters.....

Volkswagen is certainly not the flavour of the month anymore. VW is being bad mouth by everyone and the news channels are having a field day  with the resignation of Dr Martin Winterkorn its CEO and the dismissal of  the chiefs of R&D in their Audi and Porsche divisions. In fact the general interest in Volkswagen has waned so dramatically that VW, Audi, Seat and Skoda vehicle  blog sites are seeing a huge decline in surfer interest. As an avid Volkswagen enthusiast who owns a 7 year old Polo just witnessed that the amount of Volkswagen AG vehicles on sale at Gumtree.com has doubled. This is a bad sign, because I was hoping to sell my car some three weeks ago before Volkswagen's disclosed that they cheated. This is bound to impact on the price I  will get for her because the supply of VWs are way more than the current demand. Grrrrr.

The emission scandal coupled to the notorious DSG transmission debacle has really done all VAG vehicle owners a disfavour, to the point that the first time in more than 5 years, Volkswagen's share values fell below Toyota's share value. In a nut shell, your VW that won "car of year" in several divisions for several years has just depreciated to less than that of a measly Toyota... and falling. 

To make matters worse, the California Air Resources Board announced that it intends to broaden its testing of  Volkswagen AG cars fitted with diesel engines. This will include 3.0-liter V6 engines used in the the Porsche Cayenne and the Audi A6. Rival car manufacturers like South Korea's Kia and Hyundai, have seen their share prices climb as investors steer clear of German automobile manufacturers. As a consequence even German car maker BMW has suffered a 5 percent slump in its share price today. Not to mention that  businesses that service and supply components to the auto industry have also suffered a hard knock.