What is the impact of the Diesel gate on the German automotive industry?

Extract

[...] The way the Volkswagen group reacted to the scandal has also played a part in avoiding the sales to crash. The group recognized the fraud, and promised to take action. The reaction of the new appointed VW CEO, Matthias Müller, also highlights the moving relationship between ethics and consumer's decisions. Following the scandal, he decided to drastically cut the number of employees. This decision aimed at maintaining the company's competitiveness in the aftermath of the scandal, but was far from ethical, since the employees have no direct responsibility in the Diesel gate. [...]

[...] Alexander Schimpke (2015) analyzed the consequences of international treaties and globalized competitiveness on the German automobile industry. Peter Nunnenkamp (2006) focused on the relationship between this industry and Eastern Europe countries. While not directly related to the topic, his article allows to further comprehending the competitiveness of the German market. III. Discussion A. Increased sales 2017 saw the Volkswagen group sell a record number of cars: 10,7 million vehicles, a increase compared to 2016, which brings the question of the real consequences of the Diesel gate on German car sales. [...]

[...] This paper aims at assessing the consequences of the scandal for the German automobile industry. The Diesel gate exposed the morally dubious actions of the VW group to the world, and some might say that this resulted in a drop of sales for the German car manufacturers. The group has however sold a record number of cars in 2017. But, as this paper will try to prove, the issue is a bit more complex than that. First, we will have an overview of the existing literature on the subject and the related topics. [...]

[...] Rewarding corporate behavior is almost a passive act, one that does not require a major change of habit: business goes as usual; the consumers continue purchasing products after a scandal for example, as a way to reward the company for the actions taken following the event. Punishing corporate behavior, on the other hand, is a whole different beast. It brings discomfort into the consumer's life because they were used to buying the products of this company. It is therefore a conscious and active action. Neuroscientists from Leiden University found that, in raising a child, rewards are more effective than punishments. [...]

[...] It can therefore be argued that the German government's response to the Diesel gate was a major factor in the drop of the diesel sales. Early in 2018, the German Federal Administrative Court allowed the cities to ban diesel fueled car at will. Hamburg was the first city to put it into action, and others will follow, such as Munich for example. In 2018, Daimler, another German automobile company was also accused of cheating carbon emission tests. This reveal was immediately followed by a threat by the German government, evoking the possibility of a huge fine for the company. [...]