The Influence of Reputation Costs of “Volkswagen” on German Economy in 2015

This paper highlights the impact of the Volkswagen diesel crisis on the German economy in 2015. During 8 years the company produced cars with diesel engines that exceeded the standards of exhaust gases and polluted the environment. Taking into account that Volkswagen is an international organization and products of the concern are in great demand all over the world, fraud of this level has strongly affected the reputation of the concern and caused a number of negative consequences that had an impact on German economy. The aim of this work is to identify the impact of the reputational costs of Volkswagen on the German economy and to estimate the scale of damage. To achieve this goal, we needed to perform several actions: 1) To consider the emission scandal and its main events and also to analyze the possible reasons for its appearance. 2) To identify the impact of the Dieselgate on the German economy and assess the scale of the crisis using certain economic indicators. 3) Conduct an analysis of the effectiveness of the Volkswagen Group's operations in crisis conditions and to identify key factors for the successful recovery of the company. Based on the research and analysis carried out in this paper, the following conclusions have been made: 1) The company deliberately committed fraud, but there is no accurate information about all persons involved in the fraud. Most obvious reasons of Dieselgate: cost saving and competition with Toyota. 2) Negative impact on the German economy from the loss of reputation of the company "Volkswagen" was revealed. The amount of losses is estimated at 70-80 billion euros, which had a negative impact on German main economic indicators. 3) Despite the strong damage to the reputation and financial efficiency of the company "Volkswagen", the concern successfully recovered in a short time after the incurred costs, both tangible and reputational.