After the admitting emission failings for diesel cars, Volkswagen is having to face a worldwide crisis. What is the brands reputational risks? What are its consequences on Google?
Google researches timed by 3
Last Friday (25th September 2015), “Volkswagen” became the hot topic of the day, it was searched three times more in comparison to the week before. The requests related to other car manufacturers such as “Renault” and “Peugeot” did not experience any particular variation. Hence, internet users do not seem intrigued to whether other actors in the automobile industry could be involved in the same frauds.
A Google first page totally upheaved
On Volkswagen’s Google first page, a rapid analysis shows the damage caused by the scandal. As seen below, on our Google online reputation monitoring tool, the page quickly became a disaster. Four days following the revelation of the illegal software, negative articles concerning the brand were adding up.
Despite very high authority, the Wikipedia page slid down to the fifth position on Google. The free online encyclopedia has now dedicated an entire section to the scandal, and no doubt the text highlighting the scandal will continue to enrich in the next few weeks.
Google Suggest becoming negative
Concerning Google Suggest, the keyword suggestion tool, on Wednesday 30th September, the terms related to “Volkswagen” were unequivocally: « stock », « scandal » and « recall ».
“To refresh the Google first page, by bringing down or making disappear the negative results, the work is going to be extremely important and probably time consuming. To retrieve a good online reputation, the work is going to be huge” outlined Bertrand Girin, Reputation VIP’s CEO.
The scandal has not (yet?) embroiled the groups brands on their Google first page
The scandal has not yet spread to all the Volkswagen brands. Skoda, Seat, Bugatti, Lamborghini, Bentley, Porsche, Scania are not impacted on their Google first pages, excluding the “in the news” sections. The one brand that has been caught in the scandal loop is “Audi”, with three negative results on its Google page.
“Social media, the news and Google have therefore acted more than ever as a reflector for the Volkswagen brands and car models, and maybe even for the entire industry. This could blow all car manufacturers’ online reputation” concluded Bertrand Girin.
Volkswagen needs to face a worldwide scandal
For the past few days, Volkswagen is confronting the “Das Scandal Auto”. The affair revealed that the vehicles were equipped with a device capable to detect the pollution emission tests and to distort the results. Caught red-handed, the firm firstly admitted that 500,000 vehicles were concerned in the USA, before finally announcing on Tuesday (22nd September 2015) that there is at least 11 million vehicles equipped with the device worldwide.
Given the high impact on the Volkswagen brand, and the beginning of an effect on the group’s brands, models and industry, the reputation risks are having to be monitored. Will Volkswagen’s reputation be polluted by the diesel cheatings?
The consequences are indeed catastrophic for the world car manufacturer leader: the American managers are going to set suitable sanctions on the group, political chiefs around the world are all eager for explanations, the public and users feel duped and the media is playing an important role by continuously relating the crisis facts.
Volkswagen scandal timeline
18th September: it is announced worldwide that Volkswagen has installed a software to cheat on emission tests, allowing diesel cars to produce up to 40 times more pollution than legal limit permitted by the American Environmental Protection Agency (EPA). Volkswagen recalls 500 000 vehicles in the USA.
20th September: Martin Winterkorn, Volkswagen’s chief executive, regrets disappointing its customers and apologizes in a public statement: “I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter.”
21st September: Volkswagen’s shares plunge by 18% due to the exhaust scandal, the company lost at least 14 billion euros in share value. Germany puts pressure on the board of directors: they want to check that there aren’t any other cheats in Germany. The USA expands their investigations on other constructors. “I am deeply disappointed”, declared the Porsche CEO, Uwe Hück, Monday evening on the German national television.
22nd September: At the market opening, the shares are down a further 3.6%, the market capitalization has reduced to 50 billion euros. Italy opens an investigation, the Federal Automobile Office (KBA) claims explanations. Angela Merkel, the German Chancellor, calls on “full transparency” and demands the automaker to take quick action in order to handle the crisis. “Given the difficult situation, this is about showing complete transparency, clearing up the entire case,” Merkel told journalists in Berlin. The scandal is no longer limited to the American territory: 11 million vehicles are now affected all over the world.
23rd September: Martin Winterkorn, Volkswagen’s CEO, resigns. Volkswagen could be responsible for more than one million tons of pollution in the air and around 12 thousand deaths per year. The prejudiced shareholders are also planning on attacking the German group. Regulators from Germany, France, Canada and South Korea vow to scrutinize Volkswagen’s vehicles.
24th September: Volkswagen is going to have to face massive fines from regulators and lawyers preparing class action lawsuits from Volkswagens consumers. At the start of trading in Frankfurt, shares rise by 3.5%, but they are still down 25% since the scandal broke. Shares in worldwide carmakers are also affected: Mazda (6.8%), Mitsubishi (-5%), Honda (down 3%), Nissan (-2.5%) Toyota (-1,85%), Peugeot (-6.3%) and Renault (5%).
25th September: Mathias Müller (the previous Porsche CEO) becomes the new groups CEO. Stock options start picking up.