1

THE ENERGY AND RESEARCH INSTITUTE

VASANT KUNJ, NEW DELHI
November 21, 2015
Mr. Kaushik Ranjan
Teri University
Vasant Kunj
New Delhi
RE- LETTER OF TRANSMITTAL
Sir
With reference to above, the report for Volkswagen Crisis and
steps taken to revamp the image has been suggested.
We formulated certain strategies and PR activities which will help
them to improve their image and market position. Plus we looked
after how developing nations like India should be prepared with
some reforms.
So we all enjoyed writing and suggesting some solutions.
would request you to kindly check the report.
Thanking You
Yours Sincerely
Shraddha Jain
Dhruv Mahajan
Prateek Gupta
MBA- Business Sustainability

We

STRATEGIES TO REVAMP VOLKSWAGEN.

Submitted by
Shraddha Jain
Dhruv Mahajan
Prateek Gupta

MASTER OF BUSINESS ADMINISTRATION

in
DEPARTMENT OF BUSINESS SUSTAINABILITY
THE ENERGY AND RESEARCH INSTITUTE
November 21, 2015

TABLE OF CONTENTS
Executive Summary
Introduction........................................5

Strategies and
Plans.6
Lessons for
India.8

References.9

ACKNOWLEDGEMENTS
We would like to express our deepest appreciation to all those
who provided us the possibility to complete this report. A special
gratitude we give to our first year Principles and Concepts of
sustainability professor, Dr. Kaushik Ranjan, whose contribution in
stimulating suggestions and encouragement helped us to
coordinate our project especially in writing this report.
Furthermore I would also like to acknowledge with much
appreciation the crucial role of Mckinsey report, Price Water
House Cooper report and The Guardian to provide information. We
have to appreciate the guidance given by Dr. Kaushik Ranjan as
well as the people for the report and research that improved the
analysis, thanks to their comment and advices.

EXECUTIVE SUMMARY OF CRISIS

What exactly did VW do wrong?
The company put software called a defeat device on
millions of its diesel-powered cars. That software can tell
when a car is going through an emissions test, making the
vehicle appear more environmentally-friendly than it actually
is. Around 11 million cars are involved.
Why VW cheated the emissions tests?
The U.S. has tougher diesel emissions standards than
Europe, where such cars are far more common. Meeting
those steeper requirements can mean reductions in fuel
efficiency and performance, making it tougher for an
automaker like VW to advertise their diesel cars against
more typical vehicles in the U.S.
Whats happening to Volkswagen as a result of all this?
VW could face billions of dollars in fines from the EPA (U.S.
Environmental Protection Agency) and, potentially, other
government agencies around the world. Theres also the
chance of civil lawsuits launched by consumers who feel
duped.
Meanwhile, Volkswagen has taken a big hit on the stock
market, where VW shares have fallen about 38% in two days.
VWs CEO, Martin Winterkorn, was forced to issue a public
apology over the matter. But the biggest toll could be felt by
Volkswagens consumer brand, particularly in the U.S. The
company has been working hard to grab more of the U.S.

auto market and these events could certainly be a roadblock

towards that goal.

STRATEGIES AND PLANNING

Accountability-

Volkswagen

needs

to

take

concrete,

verifiable steps to hold itself accountable not only to

regulators in multiple countries, but to its customers for the
fact that this scandal happened. The CEOs departure is a
good first step, but its not enough. It went deep enough into
engineering and financial sides and there are heads who
should be held responsible and they should be roll out.
Recovering from this reputation will require much more
looking forward than looking back, but Volkswagen will need
to look back long enough to identify who, at all levels was
responsible for this scandal.
Selection of local person- They need to switch to a local
spokesperson in each market where vehicles with the
deceitful software were sold. A German spokesperson
probably doesnt resonate well in the United States; an
American probably wouldnt do the trick in the United
Kingdom.

A local spokesperson

understands the local

consumer, has a better grip on the environment in which

theyre communicating, and can more effectively convey key
points to local media.

Advertisement at Super Bowl 2016- They have 2-3

months between now and then to start getting things right;
we suggest that they should use this big platform to once
again apologize. (As learned from GM days during the
bankruptcy that a candid we messed up, and we let you
down acknowledgement resonates really well.) They should
then highlight all the steps taken since the story broke to
make sure it doesnt happen again and how theyre going to
be a new VW. This could include self-publicizing the third
party findings.

Engage
with
the
customers
(Stakeholder
Engagement)- They should launch customer program, not
just to give affected customers some sort of redress but to
convince them to come back to or stay with Volkswagen
despite the serious breach of trust. To give them new
incentives offers or leasing a higher variants of models. They
should work upon online customer portal to look upon their
queries, take their feedbacks.
Public blog systems, Video online conferencing are some of
the sources to engage with the stakeholders. VW need to
involve them and they know they are sorry and need to
focus upon how to strengthen more. They need to implement
some kind of emergency communication to its dealers, and

to develop some sort of plan for helping dealerships stay

afloat during the period of a year or more while business
slows due to low consumer trust.

LESSONS FOR INDIA

Introduction of EURO VI standards as it has more stringent
measures. India is working on EURO IV which is 12-16 years
behind Europe.
More of stronger field testing of sample vehicles.
Tightening certification tests.
Minimum interference of manufacturers in pre selection of
sample cars sent for certification.
Focus on clean diesel roadmap.

REFERENCES

McKinsey Report.
PWC Report.
The Guardian.
Vision Critical.
Porter Novelli.
Fortune Magazine.