VW scandal hurts Germany's brand

14 October 2015
LONDON: As the fallout from the Volkswagen diesel emissions scandal continues, it now appears that the German national brand has been hit too, according to new analysis.

Brand Finance said revelations that 11m VW diesel vehicles may have been fitted with software designed to cheat pollution tests have also dealt a "hammer blow" to the entire German national brand.

As a result, the brand value consultancy has downgraded Germany's national brand value by -4% to $4.16 trillion. The country has also lost its status as the world's most powerful nation brand – a separate measurement not linked to a country's GDP.

"German industry is lauded for its efficiency and reliability while Germans as a whole are seen as hard-working, honest and law abiding," the report said.

"This scandal threatens to undo decades of accumulated goodwill and cast aspersions over the practices of German industry, making the Siemens bribery scandal appear less a one-off bad apple than evidence of a broader malaise," it added.

It is unfortunate, the report said, because 2015 had been a fairly positive year for Germany's international reputation until this Volkswagen episode.

Germany had garnered worldwide admiration for its sympathetic stance towards migrants and refugees, who are expected to boost the country's ageing workforce.

Singapore takes over as the most "powerful" nation brand in the world, Brand Finance reported, although the US remains the "most valuable" nation brand with a valuation of $19.7 trillion.

China is ranked second in terms of value with $6.3 trillion while the UK is placed fourth in the world, having increased its value 6% to $3.0 trillion since last year.

Japan is ranked fifth with a valuation of $2.54 trillion, followed by France ($2.15tr), India ($2.13tr), Canada ($2.04tr), Italy ($1.44tr) with Australia round out the top ten with a valuation of $1.04tr.

Meanwhile, Volkswagen has been trying to shore up its battered reputation in the UK by running a series of print ads in national newspapers.

Running with the headline "We have broken the most important part in our vehicles: your trust", the ad acknowledged that "actions speak louder than words" and promised that the German automaker would make contact with every one of its affected customers.

Data sourced from Brand Finance, Marketing Week; additional content by Warc staff
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