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Auto Dealer Valuation & Volkswagen Emissions Scandal

Auto Dealer Valuation Affected by Volkswagen Scandal

The latest news of the Volkswagen scandal brings up a few questions:


In 2015, an emissions cheating scandal erupted within Volkswagen, the German automobile company that many people have come to trust over the years. Since the beginning of the scandal, VW has had to pay out billions of dollars in costs related to it. Recently, the company pleaded guilty to three felony counts that resulted from the emissions scandal. This is the first instance of Volkswagen pleading guilty to charges associated with this case of fraud. An auto dealer valuation expert witness will no doubt be instrumental in helping VW dealerships mitigate the damage done to their overall value as a result of this scandal. 


Details of the Volkswagen Emissions Scandal

What exactly did the VW emissions scandal entail? John Siciliano, contributor to the Washington Examiner, explained:

“The company installed defeat device software in 600,000 ‘clean diesel’ vehicles that allowed the cars to pass emissions tests, but then switched to a normal mode after testing that allowed the cars to spew about 40 times the legal limit of nitrogen into the atmosphere, violating the Clean Air Act.”

The emissions scandal impacted about 11 million vehicles globally. More than 500,000 of those automobiles were diesel cars that were sold in America.


What Charges Did Volkswagen Plead Guilty To?

As mentioned earlier, Volkswagen pleaded guilty to a total of three criminal charges, including:

  • Conspiracy to commit fraud
  • Obstruction of justice
  • Making false statements to sell goods in the United Statesauto dealer valuation

Earlier in the year, “The carmaker had agreed to pay $4.3 billion in penalties for both criminal and civil violations…after six company officials were indicted,” wrote Siciliano. On April 21st, 2017, a sentencing hearing for VW will take place. In addition to the Volkswagen company itself being charged for fraud, certain VW company officials will also be charged.


The Impact of This Scandal on Volkswagen Dealership Valuations

This scandal will no doubt have a seriously negative impact on Volkswagen auto dealer valuation. VW dealerships affected by this scandal will likely need to rely on a resourceful professional such as an automotive business valuation expert to assist them in recovering from depressed valuation. 

All facts presented here were taken from the article VW Pleads Guilty to Criminal Charges in Emissions Scandal.