A Rundown Of How Volkswagen’s 2016 Results Were Impacted By The Dieselgate Issue

by Trefis Team
-2.65%
Downside
30.30
Market
29.50
Trefis
VLKAY
Volkswagen AG
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Volkswagen AG (OTCMKTS:VLKAY) has faced the backlash from the emissions scandal, which first broke out in September 2015, causing quite a dent to its wallet. The German automaker agreed to fitting around 11 million vehicles worldwide with software that allowed cheating on emission tests. Since, the company’s stock took a sharp plunge, a halt on diesel-car sales and tarnished customer perception dampened vehicle sales, and the company has also faced several allegations and fines in different markets. Volkswagen faces several billions in fines and recalls and fixes across the globe, making a huge dent in its kitty. For example, the automaker will now end up spending over $20 billion in the U.S. alone in relation to the emissions scandal to resolve claims from the federal and state regulators and owners of the affected vehicles, and for recalls and fixes. However, the 3.8% year-over-year growth in vehicle deliveries will make the company and its management breathe a sigh of relief, especially since it signals that it has been able to manage no indelible marks on its reputation. Efforts to win back customer trust in the form of recalls, fixes, and hefty compensations to the owners of the affected diesel vehicles might have also helped Volkswagen’s cause.

Volkswagen Q&A 36

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Volkswagen

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