Volkswagen Cheating Case Study

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European biggest carmaker, Volkswagen German automobile company was accused of scandal over its rigging of diesel emission test. The company admitted to have cheating in diesel emission test in United State, German transport minister confirmed the manipulation in Europe where the company sells about 40% of its vehicle. According to the New CEO Mathias Mueller who said that the customers would need to have their diesel vehicle with illegal software be re-fitted, a situation that stand to cough out huge financial resources from the company. Analyst suggest the amount to be some worth of $6.5 billion, even when the company is under serious pressure to address the crisis which has wiped more than a third off its market value and could as well…show more content…
About 11 million vehicles were fitted with software capable of cheating emission tests, including 5 million at its VW brand, 2.1 million luxury brand Audi, 1.2 million at Skoda and 1.8 million light commercial vehicles, about 10.1 million vehicles was sold in 2014. But analyst predicted that the figure might not weight enough to offset the impending charges to face the company, as stated “The Company faces potential fines from regulators and prosecutors, as well as lawsuits from cheated customers”. Consequent to this, Volkswagen share noticeably to be dropping to about 4.1% to close at 95.20 euros in European trading market.
What Is the Rationale behind Volkswagen Manipulating The clean Diesel?
Since 2009, Volkswagen had been installing elaborate software in 482,000 clean diesel vehicles sold in the United State, so that the cars pollution controls only worked when being tested for emissions. This intricate code inserted into the vehicle
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lawmakers requested the company to turn over documents related to the scandal and other related information pertaining the development of a software program intended to defeat regulatory emissions tests. Having said that, the republican and democrats on the house energy and commerce committee requested information from Volkswagen and the U.S. environmental protection agency (U.S.EPA) as part of an investigation into the controversy. Volkswagen did not say how the planned refit would make cars with the manipulated software comply with regulations, or how this might affect vehicles mileage or efficiency, which are important considerations for customers. It said it would submit the details to Germanys KBA watchdog. According to a source who stated that the crisis is an embarrassment for Germany which has for years held up the company as a model of its engineering savvy and has lobbied against some tighter regulations on automakers. The German car industry employs more than 750,000 people and is a major source of export income. Economy Minister Sigmar Gabriel as said that he was not worried about damage to the economy from Volkswagen’s problems, but there would be no soft pedalling, no obfuscation and no covering up by the Volkswagen, however, the KBA had set Volkswagen deadline for a plan to bring diesel emissions into line with the law. As a result of this, according to the survey carried out by the researcher, it states clearly that investors are impatient
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