Hans Dieter Poetsch, the newly appointed chairman of Volkswagen AG, believes the massive “dieselgate” emissions tests scandal could threaten the company’s viability, though the challenge is still surmountable.
According to German newspaper Welt am Sonntag, during an internal company gathering last week at the VW headquarters in Wolfsburg, Poetsch said the current situation was an “existence-threatening crisis for the company”, though the newspaper also added the manager considered the crisis could be overcome. Europe’s largest carmaker and the world’s biggest automaker by sales after the first six months, VW AG, acknowledged it had cheated diesel emissions tests in the United States and Germany’s transport minister also claims the rigging was also done in Europe, as the company said up to 11 million autos around the world used the illegal software. VW has so far decided to have 6.5 billion euros ($7.3 billion) put aside to mitigate costs related to the diesel scandal – though analysts and experts contend the tally could be much higher.
Moody’s, S&P and Fitch have all set negative outlooks on the credit ratings, reports are all saying the company is now mulling additional cost cuts and that even the planned investment budget of 100 billion euros through 2018 was now under close review. Following the backlash from the scandal the company has so far lost around 35 percent of its market value and in Germany a survey reported by the Frankfurter Allgemeine Sonntagszeitung paper has 11 percent of respondents saying they would no longer consider a VW model.