Volkswagen Annual Report Out – Lost PhP 71.8 Billion in 2015

MANILA: Volkswagen! We are sure, the first thing which now strikes in the mind after hearing this auto brand is the 'Dieselgate Scandal' which brought a stir in the auto world last year. While the company is still carrying the traces of its cheating and it will take some more time in washing it off completely, VW has announced that it had to suffer a huge loss over the time due to the emission scandal. VW was already delayed its annual report and finally when it is out, it reveals that the German company suffered a nett loss of PhP 71.8 billion. The company made some hard efforts to save the reputation since the scandal was out in open, but the outrage of the customers and critics couldn't save it. Let's have a quick recap of the series of what VW did and what steps it took to rectify the problem which couldn't save its reputation -

The BIG VW Scandal

The big German company made it even bigger when it hit the news headlines in September 2015 for something wrong, something you don't expect from a renowned name like this. The news came as a nightmare for the 79 years old Volkswagen which was charged by the U.S. Environmental Protection Agency for installing 'defeat devices' in the TDI engine cars. This device can fool the regulators showing emission levels within the permitted level but actually those cars were freely spewing hazardous smog-forming compounds on the roads. These vehicles were not restricted to the U.S. jurisdiction but it was global. Initially 4,82,000 cars were found guilty of having the ' Defeat devices' which was just the beginning of the bad era for the company.

The Big Got Bigger

While the company was busy sorting out the issue with the government authorities and customers, another news came like a turmoil for the German brand. Volkswagen has an association with several other elite automobile companies and trades its engines to them. Some popular brands underwent the same emission tests and were detected with the same fault. Audi, Skoda and SEAT cars also had the same malfunction and a massive recall by these companies were made immediately. Also, Bugatti, Bentley, Porsche and Lamborghini offered the TDI engine packed cars for the emission tests to find if they were clean or fall under the 'Clean Diesel Scandal'.

Matthias Müller took over Winterkorn

Mr. Winterkorn – The CEO of VW Group during the time of Scandal took moral responsibility and bade bye to the company through his formal resignation. During his last speech, as a VW authority, he stated that he was unaware of anything happening like this in the company. Just 2 days after the post was vacated by Mr. Winterkorn, Mr. Matthias Müller – the former CEO of Porsche AG was chosen suitable for the post. Mr. Müller, during his joining speech, ensured that the matter has been taken at war front and they will take all the possible steps to rectify this problem as early as possible.

Deadlines and Raids

Though the emission tests were conducted in the U.S., but the after-effects were not restricted to any geographical boundaries. The German prosecutors raid the VW headquarters and secured substantial evidence which proved that the fraud was deliberate and not a mistake. Over the time, VW received and issued various deadlines to compensate the customers with the replacement of faulty device but guess the problem was bigger than what VW imagined or may be the efforts were not as serious as they should have been. A website was also set to find the affected cars on a global level and resolve the problem.

Back to the Present

As mentioned earlier, VW suffered a big loss, in fact, this is considered to be the biggest financial loss in the history of Volkswagen. Thanks to the 'Dieselgate Scandal'! While the company revealed that it has no plans to compensate for the PhP 71.8 billion loss, it makes us think that the company made a whopping profit of PhP 584.3 billion in the year 2014; that's what we call spinning of fortunes! The company not only suffered emotional outrage but also had to recall its cars for rectification of the fault for which it had to set-up a massive fund. Also, recently the German company signed a provisional agreement with the U.S. authorities for a buy-back program in which VW will offer to buy back approximately half a million of Volkswagen and Audi cars carrying the faulty device.

Summing this up, seems like the problems of Volkswagen is not over yet and with this pace, it will take some more time and dedicated efforts of the German automaker to clean its image and the after-effects of the scandal. With a huge financial and reputation loss, the German company is now trying to make the things better. Let's hope it all gets resolve. After all, we all love VW cars!

Also Read: Volkswagen Group to cut down its Car model variants