VW sex and bribery affair turns off buyers

Munich, Germany. The corruption and bribery affair at the Volkswagen group has hit the automaker's sales in Germany, according to a recent survey.

"The VW brand image suffered considerable damage from the failings of the top executives," says a study by Puls, a Nuremberg-based market research firm. The study was part of the institute's ACI Trendmonitor survey.

The institute questioned 1,000 potential customers who were ready to buy car about the events at VW.

"Among those surveyed, 83 percent had heard about the scandal, and 71 percent believe that the affair has damaged VW's image," said Thilo Heyder, Trendmonitor project manager.

According to the institute's findings, press reporting had a negative impact on purchasing behavior. The study showed that:

  • 15 percent of those surveyed said they would not buy their preferred brand if it was involved in a scandal like the VW affair.

  • 14 percent said they would postpone their purchase.

  • 30 percent of potential VW buyers said they would delay their purchase.

    Consumers who buy cars from VW's rivals were especially scathing about the damage to VW's image.

    Some 89 percent of potential Opel customers believed damage has been done to the VW image, as did 86 percent of Ford customers.

    German press coverage

    The German press has had a field day with the events in Wolfsburg over the past few weeks.

    "VW scandal keeps getting dirtier. Are even politicians in the sex mire?" the tabloid newspaper Bild asked.

    The wife of ex-Skoda personnel chief Helmuth Schuster told Bunte magazine article about the sharing of the potency drug Viagra during a works council business trip.

    Schuster's resignation in June amid allegations of bribery and fraud sparked the affair.

    The Bonn-based institute Media Tenor has investigated the press's take on events at VW: In the period from June 11 to July 10, the company was mentioned in 1,345 passages in the 25 media outlets being monitored. They included TV stations, daily and weekly newspapers, and trade papers.

    A total of 610 passages were negative, 617 could not be clearly classified, and just 118 were positive.

    No long-term damage

    How long will the scandal's after-effects last? "If no more scandals are uncovered, the company's recovery will be relatively quick," Trendmonitor's Heyder said.

    He assumes that the affair might simmer down in three to four months. That could happen even earlier if, for example, a scandal were to be uncovered at another company

    According to Heyder, it is important that VW "work rigorously to clear up the matter and communicate the results to the public."

    He thinks VW is on the right course. The company is seizing the scandal as an opportunity to break up sclerotic structures of the "VW system" and set them right.

    Dieter Dahlhoff, director of the CAR-Institute at the Gelsenkirchen University of Applied Sciences, foresees no fatal outcome for VW. Customers are quite capable of distinguishing between products and troubles involving the board and the works council.

    Furthermore, VW is "a large, well known and well established brand" that the bribery scandal so far hasn't been able to shake to its foundations.

    After his media evaluations, Matthias Vollbracht of Media Tenor concluded that the scandal will not harm CEO Bernd Pischetsrieder. "He can position himself as the one who clears it all up," he said.

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