Brand management is a powerful tool when it comes to marketing as a whole. Big companies rely on their reputation to market and sell their goods. So when you do something to jeopardize not only your own but the reputation of a whole industry, everything can crumble within sheer minutes.

Volkswagen has always been a remarkable example when it came to reliability, technical expertise and top engineering until it was found that they have been rigging environmental tests for diesel emissions in the US. Naturally people were incredibly upset, having paid a premium price for what they thought was a greener car when in truth these cars emit up to 40 times more than the legal limit of pollutants.

According to the Financial Times, VW shares fell by more than 30% after they finally owned up to their mistake. Die Welt even called the scandal “the most expensive act of stupidity in the history of the car industry.”

Why? “Made in Germany” is supposed to be a seal of quality and trust. People have been willing to pay a high sum to get the brand and quality they trust in. With this act of deceit, other German industries might very soon feel the consequences as well, since many of them depend on the excellent reputation of German engineering expertise.

It’s only a matter of time before the German economy will feel the impact of VW’s crisis.

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