The VW Group will survive the current scandal, which has resulted in the number of affected cars reaching 11 million cars worldwide, says Oliver Parry, Senior Corporate Governance Advisor at the Institute of Directors (IoD).
I spoke to Parry, who said that because of the sheer size of the company and the VW brand, it is highly likely to survive in the long term. While the company will and has taken a hit in the short term – share prices tumbled – in the long term, it will not make much difference materially.
Parry also added that the VW Group has an advantage in the market, as the company is so big, and German manufacturing, up until now, has been a market leader for vehicles, that the current scandal will not affect new car prices.
He said that people will always need cars, to go to work, run errands, pick up their kids from school etc, and so the VW Group will still make sales. Additionally, in terms of solid manufacturing, reasonable product pricing, cheaper parts and sustained value over time, VW has been one of the main contenders of choice for consumers.
Reputation-wise, Parry said that the VW Group has and will take a beating. Public and shareholder trust has been knocked.