Assessment of the Impact of Dieselgate on the Value of Automobile Companies

The scientific work assesses the economic effect exerted by the Dieselgate scandal on the capitalization of major automotive market players. The work is based on the Event Study methodology. The data was analyzed on stock prices for the 12 largest automobile companies. Hypotheses were tested that Volkswagen was the hardest hit as a result of the scandal, Toyota, on the contrary, won, and European brands significantly lost in capitalization because of Dieselgate. As a result of statistical tests, it was found that Dieselgate had a significant negative impact on all the largest European automotive brands with an interesting exception in the form of BMW. Also, according to the results of the study, among European brands, Porsche, not Volkswagen, was the one most hardly affected. Toyota did not benefit from a rival scandal. At the end of the work, recommendations were developed for investors and other companies in the industry who were drawn into a scandal against their will. Putting the recommendations into practice will allow either avoiding scandals in the company and minimizing the negative impact of scandals in the industry.