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Why record sales mask Volkswagen’s continuing crisis management challenge

February 2, 2017 by Jonathan Hemus

Despite news that VW is now the world’s biggest car maker it’s far too early for it to celebrate
success in its battle to preserve its reputation.

Indeed, the irony of becoming the world’s number one car maker is that Volkswagen’s singular focus on achieving this goal is probably one of the reasons why the crisis happened in the first place. When people are driven to hit ever increasing targets, there’s always a danger they will cut corners to meet the challenge (a trait discussed in our report on creating a crisis resilient culture).

Crisis management planning

Enormous amounts of management time will have been devoted to crisis management planning since the scandal broke in order to limit the reputational damage. But it’s striking that all media coverage about VW’s sales success is still framed in the context of the emissions scandal.

In the two days after the sales figures were released, more bad news followed with announcements that VW’s head of compliance and legal affairs had left the business with a 10 million Euro payoff and that Volkswagen had agreed another compensation deal with US car owners costing an additional $1.2 billion dollars. The company is clearly struggling to shake off bad news.

Protecting reputation

Crisis management is a long game and whilst sales figures will bring some cheer to the beleaguered business, the quest to preserve VW’s long term reputation has only just begun.

As Hinrich Woebcken, VW’s US president said this week: “We continue to work to earn back the trust of all our stakeholders”.

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