Volkswagen Loss Would Pose Threat To German Economy

The broader concern for the German government is that other vehicle makers such as Daimler and BMW could suffer fallout from the Volkswagen disaster.

On Tuesday, Volkswagen disclosed that as many as 11 million cars contained software alleged to have duped emissions tests and were possibly subject to a global recall.

Meantime, the company is reportedly set to name Porsche boss Matthias Muller as the new CEO.

It still faces possible criminal investigations and maybe as much as $18 billion in USA fines. “The ACCC is also considering the rights of consumers under the Australian Consumer Law”, a spokeswoman said.

This is by no means the first time in recent years that a major German company’s reputation for probity has taken a huge knock – though perhaps the first time that the damage has stemmed directly from a product that was popular with consumers.

As VW prepares for a massive clean-out of its top executives – and while Australian owners continue to be left in the dark – Maurice Blackburn class actions principal Damian Scattini said it was “likely” local buyers would be hit by the scandal. That case centered on allegations that VW’s influential employee representatives received illegal privileges, including lavish foreign trips involving prostitutes paid for by the company.

A USA branding expert based in Tokyo agrees.

The head of Germany’s main industry lobby organization is calling for “transparency, openness and speed” in getting to the bottom of the Volkswagen emissions scandal. Should, however, German citizens become uncertain due to the large influx of migrants, and-whether justified or unjustified-worry about their jobs, this would negatively affect consumption, it added. It employs over half a million people globally. Since the company owned up, its shares have plummeted more than 30% in two days. VW’s former personnel director Peter Hartz was also an adviser of former Chancellor Gerhard Schroeder, and today’s welfare system is still called “Hartz IV” after his reforms.

“Ulrich Grillo of the Federation of German Industries said in a statement Wednesday that “‘made in Germany’ stands for excellent products”.

If certain Volkswagen diesel cars were found to have breached the rules, Mr Haley said there could be a “question mark whether the cars comply with Australian consumer law, because they have to be fit for purpose”. Thanks to VW, Wolfsburg has the highest per capita salary in Germany.