What does the VW Emisions Scandal mean for the economy?

Volkswagen Car Group are Germany’s biggest private employer and Europe’s biggest carmaker, with about 300,000 workers across the country and 600,000 worldwide. The recent emissions scandal will cost the company up to $86 billion as originally the US EPA claimed that roughly 500,000 VW diesels (including models from as recent as 2014) cheated on their emissions tests, more recently VW says 11 millions cars worldwide are affected, including 2.1 million Audis, and vehicle brands Skoda and Seat. There is no question that the crisis engulfing the car manufacturer will cause damage to the company's reputation and standing in the industry; the only question is how much economic damage will there be and where and when. Clearly, this was not the work of just one person, and the company must deal with a big lack of trust by customers and the governments of the world. Although this scandal is solar limited to  the Volkswagen Car Group only, the software has been supposedly sold to other companies too “only for testing.” The main economic problem is that demand has and will dramatically fallen as consumers have lost confidence and many of the cars have been removed from sale which is costly for the company as they cannot sell the goos likewise they cannot produce more and they will have to be paying a large amount of money to repair and alter the currently sold cars. This is also bad for the customers as the scandal is likely to have dramatically reduced the resale cost of the car leaving the consumer with less in their pocket. Equally the 265,000 German employees of Volkswagen are anxious many towns such as Wolfsburg a town near Hannover, was founded together with the Volkswagen factory and is the company’s headquarter it is totally dependent on the enterprise and equally hundreds of other firms, VW’s suppliers, are likely to be in trouble many of them for totally unrelated parts to the scandal.In 2008, the University of Mannheim published a study showing that the German car industry accounted for 7.7% of gross value added in that country, the highest percentage for any country in the world. Most other European countries were in the range of 2 to 4%. With so much of the country’s economy tied up in automaking, the possible crippling of its biggest carmaker could be deeply injurious to the GDP of the country. 

http://www.seattletimes.com/business/international-trade/vw-scandal-has-impact-throughout-germany/

http://fortune.com/2015/10/14/volkswagen-scandal-europe/
http://www.theguardian.com/business/2015/oct/04/vw-scandal-is-heavy-blow-for-german-economy-says-eus-martin-shulz
http://www.bbc.co.uk/news/business-34324772
www.bbc.com/news/business-34650233
www.bbc.com/news/business-34438031