Volkswagen Emission Scandal: Impact on Sales Revenue, Share Price and Automobile Industry

Running Head: Volkswagen Emission Scandal
Academic and Professional Skills
Report
System04104

Volkswagen Emission Scandal
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Executive Summary
In the third quarter of 2015-16, the entire automobile industry was shocked because of
unethical practices of Volkswagen, which was one of the largest automobile manufacturing
players in the automobile industry. This report analyses the case of Volkswagen that is also
called ‘Dieselgate scandal’ or ‘Emissiongate scandal’. Since October 2015, many regulatory
bodies are still investigating this scandal and have managed to find out several factors behind
this unethical practice of the company. One of the major causes was the unethical practice of
their employees to face the fear of losing their jobs.
In this report, a brief introduction has been given on the causes of this scandal and further, the
impact of such a scandal has been analysed with the help of some data and statistics. The
impact of such scandal has been mainly observing on the sales revenue of the company,
impact on shareholders, Share price of the company, and impact on the entire automobile
industry. Further, there has been a short conclusion added in the report that describes the
summary of the report. In the end of the report, there are three key recommendations has been
given that elaborates what can be done to prevent such scandals in future.

Volkswagen Emission Scandal
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Table of Contents
Executive Summary...............................................................................................................................1
Table of Contents..................................................................................................................................2
1. Introduction...................................................................................................................................3
2. Analysis..........................................................................................................................................4
2.1 Impact of emission scandal on Volkswagen.................................................................................4
2.1.1 Revenue:........................................................................................................................4
2.1.2 Share Price.....................................................................................................................6
2.1.3 Shareholders:.................................................................................................................7
21.4 Automobile Industry:.........................................................................................................7
3. Conclusion.....................................................................................................................................8
4. Recommendations.........................................................................................................................8
References...........................................................................................................................................10

Volkswagen Emission Scandal
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1. Introduction
Reputation of any company helps a lot in creating positive mind-set of the customers and
helps them to be a loyal customer of a particular company. A positive reputation of company
can create a unique image of the company in the mind of customers as well as in the mind of
community in which company is operating its business. This report is about the famous
Volkswagen emission scandal that happened in September 2015, and known as “diesel gate”
or “emission gate.” In September 2015, it was found that Volkswagen was found to be guilty
of breaching the rule that was related to the emission rates. Actually, the company making
cars that appear in far less emission than required limit set by the USA, but after an
investigation conducted by ‘US environmental protection agency,' it has been found that
VW's diesel cars were emitting up to 40 times more toxic fumes on streets than permitted
(Irwin, 2018). Then the US heads of VW accept the reality that a couple of engineers failed to
develop a mechanism that was expected to reduce the emissions on the road and they were
failed to do so. However, the CEO of VW, Martin Winterkorn resigned from his post in
September and made an announcement that he was fully aware of this scandal. Further, it
analyses the causes behind this unethical incident of the company. This report also measures
the impact of this scandal on the financial performance of Volkswagen in the third quarter of
2015-16 financial years. In the end of this report, it includes a short conclusion and
recommendation that how a company can avoid such type of unethical practices in the
organisation by providing perfect training and motivation to them towards the ethical
practices in the organisation.