Volkswagen has had a tough six months. After the revelation that nearly 800,000 of its diesel vehicles, including all of its major models, had been fitted with software designed to recognize and cheat on tests, the company tanked, and it has yet to fully recover.

With the latest news that the company is set to buy back close to half a million cars, further pressure looks set to weigh on the German car maker’s market capitalization as we head into earnings season.

There are a number of companies set to benefit from VW’s mishap. General Motors Co. (NYSE: GM) and Toyota Motor Corp. (NYSE: TM) are two of the biggest.

GM gained almost immediately after the VW revelation hit the press, but weakened into the first quarter of 2016. Over the past few months, however, the company has found its footing, and it seems to be thriving off the negative sentiment surrounding its German counterpart. Much of the GM fleet competes directly with VW offerings — the Chevrolet Impala against VW Golf, the Buick LaCrosse against the VW Passat, to name just two — and flagging sales of the VW offerings will translate directly into improved buy rates on the U.S. models. This is especially true in North America, where GM already has the upper hand.

The same applies to Toyota, although this battle is far more about the European and Asian markets than the United States. Toyota competes on a like-for-like basis with nearly every one of VW’s small to midsize offerings, a range that is especially popular in Europe — as opposed to the United States, where cheaper fuel and wider roads make sport utility vehicle (SUV) ownership more practical and popular.

The VW Golf, which is regularly the best-selling car across the whole of Europe, and the VW Polo, which came in second to its Golf counterpart in 2015, have direct competition in the Toyota Yaris, which has sold more than 3 million models in Europe since launch. The Toyota Corolla also has a chance to unseat a number of the German car maker’s saloons, which are especially popular among middle-class professionals in Europe and the United Kingdom. The VW Passat fits nicely into this bracket and is one of the models hit hard on the emissions scandal.

The collateral benefit is not limited to these two companies. VW launched the Amarok pickup model in 2010, designed as a direct competitor to Ford Motor Co.’s (NYSE: F) truck range. Ford already wins out in this space in the United States, and the current situation will only serve to widen the disparity in sales between the two automakers.

All said, it’s going to be a tough year for VW, and we’ve not yet seen the full fallout from the emissions scandal. The longer it plays out, however, the more capital will redirect from its revenues to those of its rival makers in Europe, Asia and the United States.

By Matt Winkler

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