'Massive' Volkswagen scandal leaves automaker with one way forward, prof says

A marketing expert says Volkswagen has only one path forward if it hopes to rebuild its image and that is to admit what went wrong and do what it can to contain the damage.

Volkswagen is reeling after it was revealed to the public that the German automaker installed software in its vehicles to help them perform well in emissions tests, even though the results were not reflective of actual performance on the road.

The scandal spurred the head of Volkswagen to step down from his job this week, even though he denied having involvement in it.

There are indications that further executive departures could follow, with Olaf Lies, a member of the company's supervisory board, telling a radio station Thursday that "there must be people responsible for allowing the manipulation of emission levels to happen."

Ken Wong, a professor of marketing at Queen's School of Business, said that what has happened with Volkswagen is not unlike the situation that emerges when a star athlete is revealed to have used steroids.

"We never again trust them and anything they've achieved in the past becomes suspect," he told CBC Radio's Windsor Morning in an interview on Thursday. "And that's really what Volkswagen is up against right now."

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Wong said the scandal has simply caused "massive" damage to the Volkswagen brand.

Volkswagen has set aside 6.5 billion euros, or nearly $10 billion in Canadian dollars, to cover costs relating to the scandal.

However, the automaker is being threatened with major fines in the United States, which could well exceed that figure.

Then there are the lawsuits, which Wong said could involve consumers and Volkswagen dealers themselves.

Wong said it's also a problem that Volkswagen announced it had hired a law firm in the wake of a scandal, which had previously helped BP deal with the fallout from the oil spill in the Gulf of Mexico.

"That almost suggests that they are going to try and minimize or evade damages," Wong said.

"In this instance, it's a smoking gun. And when you're caught with your hand in the cookie jar to that extent, you really have no choice but to take ownership of it and do all you can to minimize the damage."