Volkswagen has taken a severe hit regarding sales. The German carmaker has reported its first quarterly loss in 15 years that of 1.2 billion pounds. This figure is after setting aside 4.8 billion pounds to cover the diesel emission scandal.
The loss in profit is excluding compensation that has been filed by many. If VW has to compensate anybody, the company's profit could take a major dent that could leave the company crippled for a long time.
The automaker is expecting a further loss, but says there will be growth this year. This loss for VW has made way for Toyota to lead the way as the World's top selling carmaker.
With Volkswagen's future uncertain, the German carmaker's CEO, Matthias Muller has announced a five-step revival plan for the company.
The first and foremost step would be to support all the 11 million customers who are affected by the Diesel Gate scandal with the 4.8 billion pounds set aside.
The second most important step would be to finish the ongoing investigation and find out who was behind the scandal. Muller claims that those involved with the defeat device scandal will face severe consequences.
Step three involves realignment, culturally and managerially within the company. Volkswagen has already suspended a few top officials, which include ex-CEO, Martin Winterkorn, who resigned after the diesel scandal came into light.
A detailed investigation into all 300 models under Volkswagen would be the fourth step. This could be to ensure that none of the other vehicles are affected or equipped with any other device that is illegal. A second time hit for the company will leave it unrecoverable.
The fifth step would be to postpone plans. Strategy 2018 will become Strategy 2025, according to which the company wanted to sell 10 million vehicles a year and become a leader in employee and customer satisfaction.
So, will the five-point action plan work for Volkswagen, or has the company lost its stand already? Do feel free to share your valuable thoughts and comments.