General Motors and Toyota to Gain from Volkswagen’s Troubles

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Volkswagen has been embroiled in the emission test scandal for the past six months already. This was after it was revealed that more than 800,000 diesel cars manufactured by the company were fitted with software which was designed to recognize to cheat on emission tests. Ever since then, the company has gone down and is struggling to recover fully.

The company is about to buy back half a million of its cars to right the wrong, and the news will weigh heavily on the car market’s capitalization as the earning’s season is on its way.

And with that kind of news, there are some vehicle firms are set to benefit from the downfall of Volkswagen as a result of this emission test scandal. General Motors and Toyota Motor Corp are two of the biggest winners.

General Motors company (NYSE:GM) was the initial benefactor back when the news broke out about Volkswagen’s emission test scandal, but it weakened in the first quarter of 2016. The company has found its foot over the past few months and the improvement is mostly down to the downward spiral that has hit its German counterpart.

This is mostly due to the fact that most of the GM fleet of cars directly competes with VW cars. The Chevrolet Impala up against the VW Golf, the Buick LaCrosse would be up against the VW Passat. This means any drop in sales of one of the competitors the other picks up, and that is what is happening to General Motors. Their buy rates are improving as people shy away from buying Volkswagen models, especially in North America, where GM already has an upper hand.

Toyota also stands to benefit from the downfall of Volkswagen. Toyota’s battle with Volkswagen is more linked to the European and the Asian markets than the United States. With every one of VW’s small to midsize cars, which are the cars most popular in Europe.

The VW Golf is the best-selling car in Europe regularly, and the VW Polo came in second to its counterpart back in 2015. These two cars are in direct competition with the Toyota Yaris, which has sold more than 3 million models already since its European launch. Another of the Toyota’s brand, the Toyota Corolla also stands a chance to remove the German made cars from their high spots.

The benefit from all the downfall of the VW is not limited to these two companies only. Launched in 2010, the VW Amarok pickup model was seen as a direct competitor to the Ford Motor’s Co truck range. Ford is already the first pick in the United States in this range, and the news is just going to widen the distance in sales between the two manufacturers.

After all is said and done, the year is going to be tough for VW as they try to handle the fallout from the emissions scandal.