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Impact of the Emission Scandal on the Volkswagen Group

Impact of the Emission Scandal on the Volkswagen Group

Executive Summary—Key Findings

Impact of Volkswagen Emission Scandal: Key Takeaways, Global, 2015 – 2020

An estimated 11Mn Volkswagen vehicles globally are equipped with illegal software code that lets these vehicles to pass the NOx testing cycle of various testing regimes. The affected vehicles are spread across Europe (􂀀Mn), UK (􂀀Mn), USA (􂀀Mn) and rest of the world (􂀀Mn).

Frost & Sullivan analysis estimates the immediate to medium term (2016–2020) economic impact of the diesel emission scandal on VW group will add up to $􂀀Bn in fines from different regulatory authorities, lawsuits, recall cost and losses from underutilization of production facilities. Frost & Sullivan have readjusted 2020 Global Volkswagen sales forecasts to drop by 􂀀%.

Volkswagen Group’s existing centralized and highly rigid corporate hierarchy to undergo drastic reformation into a more streamlined, de-centralized structure with increased autonomy for the group’s various brands and increased regional autonomy.

Immediate focus of Volkswagen management would be to schedule recalls and fix the 11Mn affected vehicles. A dedicated platform for electrified vehicles (MEB) and increased investments in developing SUVs are indicators of a major product portfolio restructuring.

Although the VW emission fiasco will serve as in impetus for electro-mobility, diesel will remain an important part of OEM strategies in achieving the stringent CO2 targets. Greater scrutiny of diesel emissions will serve to increase overall vehicle prices. In order to maintain price competitiveness the cost will be borne by Volkswagen and its suppliers

Frost & Sullivan predicts increased collaboration between OEMs in powertrain R&D to minimize the expected rising cost of compliance

About this report

Volkswagen's (VW) concession of corporate malfeasance in circumventing Environmental Protection Agency (EPA) testing in the US has sent the global automotive industry into a tailspin. This research service examines the fallout from the emission scandal and its impact on the Volkswagen group, as well as the wider automotive ecosystem.


  • Executive Summary
    • Executive Summary-Key Findings
    • Executive Summary-Short to Medium term Impact on VW
    • Executive Summary-Beyond VW's Strategy 2018
    • Executive Summary-Volkswagen Group: Total Economic Impact
    • Executive Summary-Volkswagen Group: Avenues for raising cash
    • Executive Summary-Pillars of Volkswagen Group New Organizational Structure
    • Executive Summary-Scenario Analysis on Electric Vehicle Adoption
    • Executive Summary-Conquest Potential
    • Executive Summary-Cultural and Organizational Shift at Volkswagen
    • Executive Summary-Frost & Sullivan Recommendations to Volkswagen
  • Volkswagen Diesel Emissions Scandal-Overview
    • Frost & Sullivan's Assessment of the Diesel Fiasco and the Magnitude of its Impact-The Scandal Explained
    • Frost & Sullivan's Assessment of the Diesel Fiasco and the Magnitude of its Impact
    • Volkswagen SWOT Analysis
  • Financial Impact of the Emission Scandal on Volkswagen
    • Executive Summary-Volkswagen Group: Total Economic Impact
    • Volkswagen Group-Impact to Share Price
    • Volkswagen Group-Additional Financial Implications
    • Volkswagen Group-Regulatory Action Taken by Key Markets
    • Executive Summary-Volkswagen Group: Avenues for Raising Cash
  • Financial Impact of the Emission Scandal on Volkswagen-Recall and Fix Costs
    • Recall Strategy and Solutions for Effected Engines
    • Financial Analysis of Available Fixes
    • Total Financial Implication of Recall by Region
  • Financial Impact of the Emission Scandal on Volkswagen-Fines and Legal Liabilities
    • Estimated Fines and Legal Liabilities from Dieselgate
  • Financial Impact of the Emission Scandal on Volkswagen-Costs Associated with Underutilization of Production Facilities
    • VW Engine Production Plan, 2013-2022
    • VW Emission Scandal Diesel-Production Scenario #1: Fall by 7%
    • VW Emission Scandal Diesel-Production Scenario #2: Fall by 15%
  • Volkswagen Group-Strategy 2018 Recalibrated (Current Scenario & Future Outlook) Organizational Restructuring
    • Volkswagen Group New Organizational Structure
    • Pillars of Volkswagen Group New Organizational Structure
  • Volkswagen Group-Strategy 2018 Recalibrated (Current Scenario & Future Outlook) Product Portfolio Restructuring
    • Volkswagen Group-Current Product Portfolio & Why Restructuring is the Need of the Hour
    • Volkswagen Group - Factors to consider for Product Portfolio Restructuring
    • Volkswagen Group-Product Portfolio Recalibrated for 2022
    • Global Powertrain Market-Unit Shipment, Diesel vs. Gasoline Trend
    • Volkswagen Group-Sales by Region split by brands
    • Volkswagen Group-Engine Family Portfolio
    • Volkswagen Group Electric Vehicle Launches
    • Product/Powertrain Portfolio
    • VW Emission Test Results and EPA Testing Norms
  • Impact to the Automotive Industry
    • Global Powertrain Mix-Production by Region (Pre & Post VW Crisis)
    • Impact to Regulatory Framework
    • Regional Strategy for Testing Procedures
    • A Three Pronged Push Towards Electric Vehicles
    • Scenario Analysis on Electric Vehicle Adoption
    • Electric Vehicle OEM Level Analysis
    • Conquest Potential Calculation Explained
    • Executive Summary-Conquest Potential
    • Conquest Potential
    • Select Suppliers to Volkswagen and Their Market Performance
  • Conclusion-Key Findings & Recommendations
    • Key Findings
    • Frost & Sullivan Recommendations to the Automotive Industry
    • Frost & Sullivan Recommendations to Volkswagen
  • Appendix
    • Market Engineering Methodology

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