Volkswagen is going through a crisis as a result of its scandal regarding the toxic emissions data manipulation of some of its cars.
According to the BBC, the scandal has been dubbed the ‘‘diesel dupe’’. The Environmental Protection Agency (EPA) in the US found that many Volkswagen cars being sold in America had devices in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results.
Volkswagen will likely face fines of up to $18 billion from the EPA in the United States alone for the scam according to Reuters. The car maker can face civil penalties of $37,500 for each vehicle not in compliance with federal clean air rules. There are 482,000 four-cylinder VW and Audi diesel cars sold since 2008 involved in the allegations.
It is worth noting that VW might also have to recall the vehicles and fix them again which may cost as much as €6 billion
How Does This Affect Wolfsburg Football Club?
VW is a household in German football, and a major sponsor in the league.
It owns 100 percent of Wolfsburg according to reports, and has been its main sponsor since the 1950s. German media estimate that Volkswagen injects as much as €100 million a year for the team to stay competitive in the Bundesliga, and for the VW logo to be placed on the club’s jersey.
The fine to be paid will mean Volkswagen’s spending on the football club will reduce drastically. The car maker will have to embark on cost –cutting strategies in order to focus on repositioning itself as a market leader which is only logical.
Germany’s influential Bild newspaper said that VW could slash its sponsorship to Wolfsburg by €30 million a year.
Another way in which Wolfsburg will feel the brunt of this crisis is in the investment in facilities in the club. VW has already stopped the construction of a youth academy for the club which was estimated to cost between €30-40 million.
Wolfsburg manager Klaus Allofs confirmed to the regional public broadcaster NDR that financial support for the construction of the Centre will stop, as he spoke of his understanding of the cost-cutting measures.