The world’s largest automobile manufacturer and holding company have run into deep trouble as the sales figures drop in the United Kingdom as well after the United States. Volkswagen was accused and then convicted of cheating on an emission test for their vehicles in the United States. The United States was ground zero for the scandal wherein the company used software to fudge the results of the road worthiness of the vehicles in terms of the emission norms. The scandal that flouted the emission norms resulted in a drastic crash in the company’s markets and shares across the world.
The spreading of discontent
Consumer confidence of the brand has been eroded. The consumer confidence plummet in the brand did not just stop at the United States. Apparently, the United Kingdom has also seen a strong drop in sales figures. While many within the company refuse to believe that the scandal was the reason, many experts state that the scandal is the most obvious reason for the drop in sales figures. The month of November this year witnessed a substantial drop in sales figure in comparison to the sales figures of November in 2014.
The German automobile giant sold 12,958 cars last month in comparison to 16,198 vehicles in November last year. The share market of the company has fallen from 9.4 percent to 7.2 percent. Additionally, Volkswagens subsidiary brands have also suffered a similar plight. In the United States, Porsche, Audi, Skoda, and Seat were also some of the brands that were subject to the flouting of the emission norms. This has resulted in a general lack of consumer confidence in Audi, Skoda, and Porsche’s market in the United Kingdom as well.
The automobile market has picked up in the past few months, whereas, Volkswagen market has dropped. The automobile market sales rate has increased by nearly four percent. After the admission of the scandal, the company admitted to using the software to cheat on emission norms for 11 million vehicles globally. Over eight million vehicles have been identified and have been exported to the European markets itself.
The consumer confidence may be an uphill battle to regain. The general mood towards the brand and its subsidiaries is that of distrust. Volkswagen has set aside over seven billion dollars on compensations for dealers, consumers, and any other affected parties. The company has also gone on a PR campaign to rebuild the company’s brand and image in consumer and market perception.