Volkswagen Emission Scandal - Principles of Marketing

Position Paper

Principles of Marketing

Devina Wirawan

12414063

Class ID: 128

Volkswagen Emission Scandal

The World’s biggest car maker, Volkswagen, has been doing its testing in the United States to avoid supervision has breakthrough their sales brought a disbelief to the car industry. The company had admitted that they are using special software to decrease down emissions during diesel vehicle testing. Since the first day the story broke, the scandal has enlarged further. The company indicated that about half a million cars in the US and 11 million cars worldwide would be emitting a higher level of nitric acid and nitrogen dioxide. The company has prepared $7.2 billion to fix this scandal. And according to the US Environmental Protection Agency, US car manufacturers will face a more strict emission test. What impact does this bring to the company? There are three main arguments relating to this scandal. First is related to loosing sales, second is that other diesel cars are not affected by VW emission scandal and last but not the least is related to product recovery.

        Firstly, Volkswagen looses sales top spot to Toyota after emissions scandal.  According to Koji Endo (2015) Toyota will be number 1 as for this year because VW will be facing sales difficulty toward next year in Europe and US, and the Chinese market is not coming back soon just yet.  From this scandal, Toyota is taking most of the benefits as they are preparing to launch the first top selling hybrid car with promising fuel efficiency. Toyota’s marketing is boosting right now as their top rival is declining in market. Toyota has won the market’s trust since the scandal evoked, Bailey (2015) said that Toyota has gone back to doing what it did best which was quality and let the growth take care of itself. VW went for growth at all cost and we have seen the consequence of that. And by this, VW decided to announce a strategy to concentrate on making their products with cleaner exhaust emissions system.  

        Next is regarding Volkswagen scandal. It did not affect any other diesel cars. According to Matt Burt (2015), there is no impact of negative demand for diesel-engine cars in the UK. Other company knows how to use this time to increase their sales by boosting up their advertising on the products. With this scandal, it doesn't mean that Volkswagen is facing a break down; customers are still purchasing their products such as Volkswagen Polo and Golf. For example, before customers easily purchased Volkswagen products, but now they have to think twice because of the scandal, and again it doesn't mean they are going to stop buying in fact buyers are not shy ordering Volkswagen products either, with the Golf and Polo.