Insight article

Volkswagen – brand authenticity blown out of the water

The Volkswagen emissions scandal is a total and utter disaster for the German automotive industry. For a nation so proud of its heritage and cutting edge technology, design and performance, it couldn’t get much worse. Vorsprung Durch Technik? Hmmm, we’ll have to have a think about that one now.

Two of Volkswagen’s ‘Basic Principles’ are ‘Leading by Example’ and ‘Social Responsibility.’ Well those have been blown out of the water for a start. Years of building the brand, represented by some of the classiest, most well-respected and best-loved names in the world’s car industry (Bentley, Porsche, Audi, Bugati, Skania and Lamborghini to name just a few – even if the majority of them are not affected) have ended in what will be a tarnished reputation of epic proportions. Not to mention a hefty recovery bill and the wiping of $25 billion off its market value. To say the company has to clean up its act is ironic, given the circumstances. A cleaner, greener, more environmentally-friendly diesel vehicle won’t be sold – at least for the moment – with any sense of authenticity and pride.

It’s not only the company’s shareholders and customers who will be affected by this. VW dealers all over the world will take a hit. Suppliers will take a hit. And 592,500 employees all over the world will question how they can trust their leaders. How can their people believe in those at the top – leaders whose emission – sorry, admission – to ‘screwing up’ and acting with deliberate dishonesty? The nirvana of any brand is to be the source of unwavering pride and loyalty from both its customers and its employees. Performance in any organisation is dependent on trust and belief in the people who lead it. It’s hard to see how those who have admitted culpability can possibly stay.

After one of the saddest moments in Germany’s corporate history, VW has got a long, uphill climb ahead of it. Recovery will take a long time. And once it has, its leaders will need to reset its values and behaviours, and go overboard in walking the talk. Or, as they say in Germany, Lass Worten Taten Folgen.

Nailia Tasseel