Reputational damage may slow VW in its global race against Toyota.
Losing confidence? Image: Marc van der Chijs |
The aftermath of an emissions scandal that rocked the German auto giant may now see a loss of trust from consumers in one of its core markets: China.
Many potential car buyers live in some of the nation’s most polluted cities, where emissions are a major concern.
VW deliveries in the country had already dropped 5.8% in the first eight months of the year despite industry-wide sales rising by 6.3%, which the German automaker attributes to its lack of offerings in the budget SUV segment.
Volkswagen is increasing output in China, which accounts for around 35% of global sales, to 5m vehicles by 2019 and losing further sales in the region would seriously affect its bid to overtake Toyota as the world’s largest automaker.
A recent survey by advertising giant McCann Erikson reported 41% of Chinese consumers placed ‘trustworthiness’ as one of the most important factors when choosing a brand. The same number said peer-to-peer conversations also help them trust a brand more, considerably higher than their Asian and Western counterparts.
The 2,000 vehicles recalled in China thus far are insignificant in comparison to the 11m vehicles globally VW estimates are affected by its admission of using defeat devices to 'cheat' emissions testing equipment.
China sales slid again in September by 0.8% to 318,400 vehicles, although still edging out GM and Ford.