Cars and Drivers

Volkswagen Tops List of Worst Company Reputations

Douglas A. McIntyre

Published: May 13, 2016 9:53 am

Last Updated: January 13, 2020 8:06 am

Volkswagen’s reputation has headed in the same direction BP’s did after the Deepwater Horizon disaster. The VW diesel engine cover-up has triggered recalls of what likely will be millions of cars around the world. The company already has set an $18 billion reserve because of the scandal. In 24/7 Wall St.’s recently published Companies With the Best (and Worst) Reputations, VW did the most poorly of all the organizations mentioned.

24/7 Wall St.’s analysis of the German car company:

Volkswagen Group
> Reputation score: 54.75
> 2015 score: 75.21
> Industry: Automobile manufacturing
> CEO: Matthias Müller

Volkswagen’s case is proof that a company’s reputation — and fortune — can change due to a single incident. For years, clean diesel was presented as an alternative to hybrid engines and was promoted as a major reason for consumers to buy cars with TDI engines. Last year, the Environmental Protection Agency accused VW of deliberately designing its vehicles to circumvent emissions tests. This was eventually confirmed, and overnight, the company went from a revered automaker to one of the most widely-disliked major companies. VW has set aside $18 billion to cover legal fees from various lawsuits and the buyback plan it is implementing for the vehicles. Volkswagen U.S. sales have plummeted as a result. The company’s reputation quotient fell by more than 20 points, from a score of 75.21 to a score of 54.75. The next biggest decline for a major company was CVS (NYSE: CVS), whose reputation quotient fell by just five points.

As the scandal continues to unfold, VW’s reputation could worsen in next year’s study.

Methodology: To determine America’s most and least reputable companies, 24/7 Wall St. reviewed reputation scores among the nation’s 100 most recognizable companies from the 2016 Harris Poll Reputation Quotient (RQ), produced by Harris Interactive, a subsidiary of Nielsen. The study consists of two parts: a nominations stage in which consumers identify the nation’s most visible companies, followed by a ratings stage in which each company’s reputation is measured on a scale of 0 to 100. In addition, company consumer satisfaction scores from the American Customer Satisfaction Index (ACSI) and company information from SEC filings were considered.