Subject category:
Strategy and General Management
Published by:
International Institute for Management Development (IMD)
Version: 04.02.2016
Length: 16 pages
Data source: Published sources
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https://casecent.re/p/140357
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Abstract
The case study concerns the controversy over alleged deception of vehicle emissions tests by the Volkswagen Group (VW). On 18 September 2015 US authorities made serious allegations against the firm, the second largest automotive manufacturer in the world, which is 51% owned by the Porsche-Piech family. It ordered a recall of VW cars, claiming they emitted between 10% and 40% more noxious nitrogen oxide (NOX) gases than the formal tests indicated, and that the firm had fitted sophisticated software or ‘defeat devices’ to detect when a car was being tested. The chief executive resigned and the company lost billions of euros in share value, VW had its first quarterly loss in 15 years. Sales fell by over 5%. Authorities in different countries and car owners launched litigations against the Group, and criminal prosecutions were expected to follow. In December 2015 VW took out a EUR20 billion bridging loan as a result of the crisis.
Industry:
Size:
Annual sales EUR202 billion, market capitalization EUR111 billion. Number of employees: 592,600
Other setting(s):
Mid-2015 to February 2016
About
Abstract
The case study concerns the controversy over alleged deception of vehicle emissions tests by the Volkswagen Group (VW). On 18 September 2015 US authorities made serious allegations against the firm, the second largest automotive manufacturer in the world, which is 51% owned by the Porsche-Piech family. It ordered a recall of VW cars, claiming they emitted between 10% and 40% more noxious nitrogen oxide (NOX) gases than the formal tests indicated, and that the firm had fitted sophisticated software or ‘defeat devices’ to detect when a car was being tested. The chief executive resigned and the company lost billions of euros in share value, VW had its first quarterly loss in 15 years. Sales fell by over 5%. Authorities in different countries and car owners launched litigations against the Group, and criminal prosecutions were expected to follow. In December 2015 VW took out a EUR20 billion bridging loan as a result of the crisis.
Settings
Industry:
Size:
Annual sales EUR202 billion, market capitalization EUR111 billion. Number of employees: 592,600
Other setting(s):
Mid-2015 to February 2016