“The Volkswagen group will ensure the equalization in case taxes increase”. With this statement, contained in a letter sent to the 28 financial ministers of the European Union, the CEO Matthias Mueller ensures that the automaker will pay all additional taxes in case of their imposition onto the cars involved in the Co2 emissions scandal. It is a painful decision, yet it is essential if they want to preserve their customers’ trust.
According to recent indications, it could involve 800,000 cars; therefore, it would be a real drain on the company’s resources, still not as heavy as losing appeal in the consumers’ eyes could be. Mueller asks the ministers to send the accounts of any additional bills directly to the Wolfsburg address, safeguarding the customers. A few days ago, the German Minister of Transport, Alexander Dobrindt, had said that the company should feel duty-bound not to impose the weight of a further scandal on its customers. In the letter to the EU ministers, Mueller from Vw also explains that the complexity of the case still does not allow us to provide exact figures on the number of cars involved in the Co2 case.
Meanwhile, Moody’s believes that the net impact of the Dieselgate scandal and its subsequent developments can reach 31 billion on Volkswagen, while in the best case scenario, it will stop at 9.5 billion. This is what came out of the meeting held to make a point about the European corporate and automotive sector, during which the analyst and vice-president Yasmina Serghini-Douvin intervened on car industry. The estimation was made before the scandal spread also to petrol and carbon dioxide engines this week.
In the worst case scenario, indicated by Moody’s at 31 billion, the impact on the market is might be of 17 billion, the cost of ‘reclaiming’ – 12 billion, 10 billion for disputes, whereas any countermeasures of the company could spare 8 billion. In the scenario with the lowest impact, on which, increasingly under pressure as the scandal grows, the market impact will be of 3 billion, the cost of reclamation – 6.5 billion, 2 billion for the disputes and 2 billion for the possibility of company’s intervention to offset the impact.
The new Dieselgate developments “add more risks to Volkswagen’s reputation, its future sales and liquidity”, it was explained. They raise “serious questions about internal control and governance, which could be more widespread than thought at first, and which Volkswagen will have to face aggressively during the next months. These elements further weaken the position of the company’s rating”. This is why it is absolutely vital to avoid damaging the customers, besides having duped them.