Effect to the Investment Essays - Transport, Volkswagen Group

Effect to the Investment Essays - Transport, Volkswagen Group Effect to the Investment As a result of the diesel emissions scandal, Volkswagen has said it will cut investment by $1.1billions a year. They are now focusing on "repositioned itself for the future" as the efficiency and technology would be the company's watchwords. A greater focus on hybrid and electric vehicles will be given. VW's Dr. Herbert Diess said " We are becoming more efficient, we are giving our product range and our core technologies a new focus, and we are creating room for forward-looking technologies by speeding up the efficiency programme " . According to the Analysis: Theo Leggett, BBC business correspondent, it is no surprise of Volkswagen cutting their investment. It is facing potentially huge fines, class action lawsuits and possible criminal penalties, in the US and quite possibly other countries as well. The 6.5billions Euro to cover the costs of the scandal is said to be enough. Effect to the Trading In order to captivate back customers, the carmaker is offering bigger discounts. The German carmaker has admitted using software to allow diesel vehicles to cheat emissions tests. According to Germany's Automobilwoche , Volkswagen raised discounts up to 1681 euros ($1.896.17) to boost used car trade. This came to an existence because a Volkswagen spokesman said that the promotion in Germany around the same level as competitors. Furthermore, discounts were common measures that allowed company to act in a flexible way to comparable offers from rivals. Thomas Zahn, head of sales and marketing for passenger cars has admitted that Volkswagen had not won back trust as fast as expected. He further says that they have not met the ir own plans and expectations. Effect to the Profit of the Company Earlier in 2016 the car sales of Volkswagen continued to fall and the profit tumbled nearly 20% due to the emission scandal. A year before, the company's profit were nearly 4billions Euro. According to the company, their revenues were decreased about 3.4% due to the decline in their vehicle sales and negative exchange rates. Volkswagen also recorded its first annual loss in more than 20 years for 2015, after the 16.2biliions Euro were set aside to pay for costs related to the scandal. The German carmaker admitted it had installed software to cheat US emissions tests in 11m diesel vehicles. The carmaker will buy back about 500,000 cars and give compensation to the owners under the deal struck with the US Department of Justice.