In lieu of the Volkswagen scandal
that hit the news just one month ago, it is important to recognize the affects something like this could possibly have on the worlds economy and specifically the German economy.
Volkswagen, responsible for 20% of Germany’s Exports, 2.7% to its GDP and over $411mn in revenue, is now taking a huge hit threatening the collapse of the Germany automobile industry and a great blow to the German economy. Since this past July, surpassing Toyota, Volkswagen is the number one car export in the world. This means there are a lot of German engineered cars out there that where affected by the false. test results. The fact that Volkswagen claimed to be “greener”, relying on the faulty test to back up their claims while in reality their diesel cars on the road where pushing out more COx emissions than all COx emitters country wide combined, should bring a sour taste to your mouth.
We are certain to see many law suits arise over the coming months. Which means the dishing out of large sums of money by Volkswagen. The only action so far taken by Volkswagen would be its recall of all diesel Passat, Golf, and Beetle models from the United States. Which is a big step considering one in every ten cars in the states are German Engineered. But hopefully this isn’t the only step to be taken.
“If nobody else has done it, the damage would be limited. If it looks like it’s more companies, not just Volkswagen, it would be a major problem for the German car industry, and the German economy overall,”
said Theo Vermaelen, a finance professor at INSEAD. On that note, I guess it’s safe to not foresee a crash in German automobile industry and not to big of a hit to its economy since over this past month no new companies have emerged.
A situation like this just goes to show the affect of higher up big business “cheats” can have on a country and on the world. This scandal could have been the end of the German automobile industry and certainly the trust behind German Engineering. In fact that is the only thing they have succeeded in so far, having to dish out Billions of dollars, and tarnishing the good name that used to be: German Engineering.
Consumers and governments will now want to see all manufacturers’ claims tested and retested. This particular cheat may just be unique to VW but the scandal has now sparked curiosity on how so few test results match real-life emissions.
