As chief executive Martin Winterkorn resigns, will Volkswagen survive the emissions tests catastrophe?

Will Volkswagen survive the emissions tests catastrophe? (Source: Getty)

Bill Blain, strategist at Mint Partners. style ‘Donut’, says Yes

Speculation that Volkswagen is doomed is way-wide of the mark. Suffer? Yes. Dead? By no means.

Markets overreact – at some point its deeply discounted share price and suddenly toxic bond issues will be a screaming buy.

The question is when – and it’s not yet. The company has got cash in the bank and assets it can sell. Damage has been done and we can’t condone the knavery of fraudulent emissions numbers. But will VW prove the only guilty party?

Remember: the Koreans were done last year on similar charges. While politicians fulminate about punishment, that’s largely for electoral consumption. Who really wants to risk their own domestic auto industry to exposure, risk jobs and votes, or set off a trade war with Germany and thus Europe?

VW has suffered a Ratners event – a moment of such utter and complete management failure that more heads will roll and massive fines will be levied.

But this is not the end of the VW story – it will survive, but possibly in a much changed and chastised fashion. This remains an evolving story, but not an extinction event.

Sophie Devonshire, chief executive of The Caffeine Partnership, says No

Strong brands are sensationally valuable assets – for many reasons. Top of the tree is that businesses need one for days like yesterday – a tough day for Volkswagen’s leadership. Strong brands help to protect companies (and chief executives) against mistakes.

They deliver resilience for an organisation, allowing them to survive and bounce back. Customers can accept mistakes do happen.

Look at the rest of the car market. Mercedes survived the A-class tipping nightmare, Toyota its product recalls. But today’s scandal is different – which is why there’s more of a challenge for VW.

First, the zeitgeist is bored of a world where big corporates (and politicians) are expected to lie; it’s tiring.

Technical issues are one thing, duplicity harder to manage. Whitewashing, greenwashing – now carwashing. And second, the best brands have to be based on truth.

If the company is “reliable”, but the truth is that it isn't, consumers – and investors – are too smart to accept that.

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