Diesel Scandal Threatens VW's Slim Global Sales Lead Over Toyota

 Week Beginning: 21.09.2015

The scandal that Volkswagen cheated on emissions for testing diesel engines cost the company’s CEO Martin Winterkorn his job and Volkswagen the global auto sales crown, which it only received this year. In the first half of 2015 VW sold more vehicles than its competitor Toyota. VW sold 5.04 million vehicles, about 20 000 more than the Japanese company. 

Since then there has been declining demand for VW in China. It has been predicted that the sales will decline by at least 400 000 vehicles next year, due to the revelation that 11 million of the vehicles have software designed to circumvent air pollution rules. Shortly after becoming CEO in 2007, Winterkorn set a goal of leading the global auto industry in sales. In order to stay at the top that VW finally achieved this year, Winterkorn’s successor will have to begin cleaning up the diesel emissions mess while stemming sales declines in China, where the auto market is poised to contract for the first time in decades. 

After reporting global sales declined 0.5 percent during the first six months of 2015, Volkswagen said July deliveries slumped 3.7 percent. While Toyota’s sales fell 1.5 percent in the first half, the company says its China deliveries have risen 13 percent this year through August, driven by demand for its new Corolla and Levin compacts. It was already predicted that Volkswagen was going to lose its lead again because the sales in China had been weak compared to Toyota’s, which have been relatively strong.

In order to become the market leader of the automobile market Fiat Chrysler is seeking a merger with GM, arguing that in the auto business, bigger is better because larger companies can more easily shoulder the steep costs of developing new models.
Volkswagen scandal was compared to Toyota’s 2009-2010 unintended-acceleration crisis and GM’s ignition-switch recalls over the past year. It was estimated that Volkswagen may see a sales decline by 1 percent to 4 percent, or 100,000 to 400,000 vehicles as a result of the diesel revelations. 
The affair will also threaten profits because the company will face higher costs for emissions compliance and may need to discount its cars to get shoppers back into showrooms.

This article links to Ethics of CUEGIS, since one of the biggest car companies cheated on emissions for testing diesel engines. Volkswagen tried to increase their sales and make more profit, whilst they should have thought about their customers in the first place. This could have an impact on the customer’s health and adds to greenhouse gas emissions, which is considered to be unethical. 

The article also links to Change of CUEGIS, since this a big change not only for the company, but for the whole market and especially for competitors like Toyota. Since Volkswagen was the market leader during the first 6 months of 2015, followed by Toyota, the company (Toyota) will now be back at the top as the most successful automobile brand. For VW a change in sales is predicted, since less people will now buy a car from this company due to the scandal.

 It also links to Globalization to some extent, since VW and Toyota are multinational companies operating worldwide. This is only possible because of globalization. And since Volkswagen is operating in many countries, the scandal also spreads in every country, which has an impact on the sales not only in the country the scandal happened, but probably in all Volkswagen operates in.

Furthermore this article also links to the topic of marketing, since the scandal has an impact on the brand image of the company and might therefore also change the brand loyalty of some customers. 

 First of all it also links to market share, since Toyota will now have a higher market share again in the automobile market and become market leader. If the scandal of VW had to do with an error in the production or planning process of the car, then it also links to quality control and quality assurance. In this case there would have been a lack of quality in the product. In order to fix this the VW will have to introduce some methods to increase sales again, save their brand image and for the next time managing their products quality.