Investors are troubled after Volkswagen’s poor performance in the market. After a series of mistakes, chief among them being Volkswagen’s dubious trickery involving the American emissions rules, has the company in hot water with the government and economy. Coming on the heels of their diesel “defeat devices” scandal, Volkswagen has never suffered this much negative PR, and the market’s reaction mirrors the decline in public opinion.
Volkswagen stock plummeted 20% in the European morning markets. In the U.S, the entire line of diesel products was halted to be sure no further fines would be levied against the company. Still reeling from the $900 million settlement with General Motors over ignition switch defects, Volkswagen’s public image is suffering. Once the world’s biggest car manufacturer, analysts suggest that The Curse of The World’s Biggest Carmakers is very real and has now set upon Volkswagen at the height of their success.
Though silly to some, every car company that’s held the coveted spot as #1 in the industry has inevitably fallen victim to themselves. GM once ruled over this spot as the highest seller. For decades, they reigned over all other car companies, and then 2009 brought bankruptcy and a need for a federal bailout. After supplanting GM the year prior, Toyota enjoyed their time in the coveted spot right up until its collapse due in part to poor management from chief executive Akio Toyodo.
Many market analysts are viewing Volkswagen’s crisis as their turn in the grinder. Every large company is expected to receive negative press by virtue of being so public, and if there’s a silver lining Volkswagen is clinging to, it’s that their mistake didn’t cost any lives. Both GM and Toyota faced scandals that carried a weighty human cost, an inexcusable and unforgivable act in the eyes of many consumers. Though little can be said for how the case will turn out, Volkswagen is hopeful that by quickly addressing their wrongdoings, they can erase the smudge on their public image. For more on the subject, click here.