With the world wide scandal of emissions standards that were revealed earlier this year for the diesel engines of Volkswagen the thought would be that Volkswagen has taken a huge hit and a step back.  It seems scandalous that emissions testing has been cheated for several years on the diesel engines and is going to cost the company much more than it can well afford to lose, possibly shutting the doors of Volkswagen for good. Even though this is a huge financial blow, the company is circling its proverbial wagons and learning how they can come out of this in a positive manner.

So far this scandal has cost the company two main things; reputation and money.  The cost thus far amounts to nearly 8.7 billion euros which is much more than what the company expected to have to pay for this issue.  The reputation part will take much longer to repair than the money they are tossing at the problem, but there are several factors to consider when it comes to both the money and the reputation that maybe many of us haven’t thought of just yet.

First of all, Volkswagen is only the parent name of the Volkswagen Group which is made up of twelve brands that are some of the most highly acclaimed brands in the industry.  This variation of brands helps to keep the entire group solvent and certainly allows for a greater buildup of cash.  Volkswagen had set aside 6.5 billion euros to deal with the scandal but the cost as you can see was much greater.  In order to make up this difference Volkswagen has had to look at some other ways of handing the challenge of making up the difference to be financially solvent once again and find ways to begin the process of rebuilding their reputation.

With that in mind, the company has announced plans to scale back on trim levels in order to create a simpler process for making their vehicles and offer a way for their production to be more efficient.  This cost saving effort is expected to save roughly 1.9 billion euros for VW alone and 5 billion euros across the group by gaining efficiency in the manufacturing process.  This will certainly have an effect on the market and cause a change in what can be offered by Volkswagen Group as a whole.

Will we see the dissolving of some brands?  Does this spell the end of the performance divisions of the Volkswagen Group?  Both are interesting questions that currently don’t present any answers.  The goal thus far seems to be protecting the jobs of those who are still employed by the company while cutting back on the trims and creating less of a need for the overall logistics of the various models.  As we move through this story we get to see how a company finds a way to bring themselves back from a detriment they created for themselves; it will be interesting to continue to follow and discuss this scandal.