Subject category:
Ethics and Social Responsibility
Published by:
IBS Case Development Center
Length: 13 pages
Data source: Published sources
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https://casecent.re/p/153244
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Abstract
Germany-based Volkswagen AG (Volkswagen) was founded in 1937 and by 2012 it was second-largest producer in motor vehicles in the world. In 2013 it was ranked ninth in the Fortune Global 500 list. By 2014 its production output was of 10.14 million vehicles. In 2009 Volkswagen Group started using Turbocharged Direct Injection (TDI) technology for better fuel efficiency and to reduce emissions. The Volkswagen vehicles using TDI technology were granted subsidies in various countries. In October 2014 the International Council on Clean Transportation (ICCT) and West Virginia University (WVU) published a study on real-world exhaust emissions from modern diesel cars, and it was reported that two of Volkswagen vehicles - Volkswagen Jetta and Volkswagen Jetta exceeded the prescribed emission limits. It was later found that Volkswagen cars used a 'defeat device' which manipulated the emission during laboratory tests in order to meet standards during testing. In September 2015, the United States Environmental Protection Agency (EPA) issued a notice to Volkswagen AG. The company admitted that over 11 million cars worldwide were fitted with defeat devices. As a direct result of this scandal, the CEO of Volkswagen, Dr Martin Winterkorn, resigned. The scandal landed VW in the worst crisis it had experienced in its 78-year history. It not only pulled down VW's stock price, sale, and brand value drastically but also attracted fines and penalties worth billions of dollars.
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Abstract
Germany-based Volkswagen AG (Volkswagen) was founded in 1937 and by 2012 it was second-largest producer in motor vehicles in the world. In 2013 it was ranked ninth in the Fortune Global 500 list. By 2014 its production output was of 10.14 million vehicles. In 2009 Volkswagen Group started using Turbocharged Direct Injection (TDI) technology for better fuel efficiency and to reduce emissions. The Volkswagen vehicles using TDI technology were granted subsidies in various countries. In October 2014 the International Council on Clean Transportation (ICCT) and West Virginia University (WVU) published a study on real-world exhaust emissions from modern diesel cars, and it was reported that two of Volkswagen vehicles - Volkswagen Jetta and Volkswagen Jetta exceeded the prescribed emission limits. It was later found that Volkswagen cars used a 'defeat device' which manipulated the emission during laboratory tests in order to meet standards during testing. In September 2015, the United States Environmental Protection Agency (EPA) issued a notice to Volkswagen AG. The company admitted that over 11 million cars worldwide were fitted with defeat devices. As a direct result of this scandal, the CEO of Volkswagen, Dr Martin Winterkorn, resigned. The scandal landed VW in the worst crisis it had experienced in its 78-year history. It not only pulled down VW's stock price, sale, and brand value drastically but also attracted fines and penalties worth billions of dollars.