The emissions scandal which has engulfed Volkswagen in recent weeks and its attempts to cover up the wrongdoing has had a catastrophic impact on the publics’ perception of the brand image according to a new study by YouGov BrandIndex UK.
The German car manufacturer’s manipulation of its emissions in some of its diesel cars has rocked the company and resulted in the resignation of its chief executive, Martin Winterkorn.
YouGov BrandIndex UK has revealed how the public’s perception towards the brand image has changed throughout the scandal. The Volkswagen brand health was measured across four key indicators; index, buzz, quality, reputation and impression during the 10 day period between 18-27 September.
The results show that the public perception of the brand’s overall health saw the most dramatic decline, which is likely to be the most serious indicator for the brand according to Sarah Murphy, director YouGov BrandIndex UK. Murphy said that “experience tells us that once this metric begins a concerted move south, a brand is in trouble as it points to it being more than a headline-generated storm in a teacup and instead being a real problem that is having a notable impact on all areas of its public perception”.
In order to provide some context the study compared Volkswagen’s situation to the last major scandal to affect the car industry which occurred in 2010 and involved Toyota. That incident exposed major brake flaws in some of the Japanese cars resulting in a huge number of vehicles having to be recalled. An analysis of Toyota’s public perception revealed that even after four months it had failed to recover the ground it lost.
A comparison between Toyota and Volkswagen’s Index scores suggests that Volkswagen is likely to face an even greater challenge in recouping the ground it has so quickly lost.
According to the study, Volkswagen’s brand health is falling further and faster than Toyota’s because it allegedly intentionally mislead customers and attempted to cover it up whereas Toyota's problem was due to a manufacturing failure which it did not attempt to mislead customers about.
The study warned that things are likely to get worse for Volkswagen and says that the question now hanging over the automotive industry is not when the crisis will end but will anyone else get dragged in?