The Volkswagen emissions scandal has already wiped 10 billion dollars off the company's brand value, according to one brand valuation firm. And as Ivor Bennett reports, it's also putting a much bigger brand at risk: 'Made in Germany'.
It's been an icon of reliability for decades. The beloved Beetle synonymous with quality you could trust. That is until now. And the revelation Volkswagen cheated emissions tests has cost the company dear, says Brand Finance's Robert Haigh. SOUNDBITE (english) ROBERT HAIGH, MARKETING AND COMMUNICATIONS DIRECTOR, BRAND FINANCE, SAYING: "The sheer scale of it and the deliberate nature means it will really have a very significant on VW's brand. Brand Finance estimates that the damage done already could amount to 10 billion dollars wiped off its intangible value." It's not just the company's image under threat though, but Germany's in general. The auto industry accounts for an estimated 1 in 7 of all German jobs. A key export and a key part of the national brand - no wonder the government is desperate to protect it. (SOUNDBITE) (German) SPOKESWOMAN FOR GERMAN ECONOMY MINISTRY, TANJA ALEMANY, SAYING: "It is an important pillar for the German economy and we see no reason to doubt that the outstanding, innovative auto industry will remain just that." Brand Finance is not so sure. Although it ranked Germany as the world's most valuable nation brand last year, it estimates a dent in consumer confidence could cost it billions. A good chance then for a rebrand. SOUNDBITE (english) ROBERT HAIGH, MARKETING AND COMMUNICATIONS DIRECTOR, BRAND FINANCE, SAYING: "Germany's nation brand has actually been strengthened somewhat in the year prior to this incident because of their receptive attitude towards refugees. So it's very unfortunate for them that this would come up now and we just have to hope that it isn't such a widespread problem." The European Commission is taking no chances, urging all member states to carry out their own investigation. As the spotlight also falls on other German carmakers. BMW has denied manipulating emissions tests after being implicated by a German trade magazine.