Seems hard to know how folks will feel about this six months or a year from now.
GM was willing to kill over a hundred people to save a couple cents on ignition switches. It went fairly high in the company; at least the culture that encouraged this. Eventually over 30 million cars were recalled worldwide. And GM had long ago used up it's reservoir of trust and good will among many consumers. Still, today it would be hard to see a dramatic effect on either vehicle sales or stock prices. The company and its executives pretty much got a pass (albeit an expensive one) by the legal process, regulators, investors, and consumers. Seems the only one to lose their livelihood was the whistle blower.
Toyota, once with an impeccable record of reliability and consumer trust, has had numerous "oops" moments. But, people who liked Toyotas still like Toyotas.
One thing that hasn't been disclosed yet is how high this went up the VW hierarchy. A couple smart ass programmers looking for a bonus? Or most of the way to the top? That information may have some impact.
There's at least one way many consumers could give VW a pass sooner than later:
1) They really don't care about NOX emissions; they just want decent performance and high mileage. Gaming the EPA is OK with them.
There are at least two ways some consumers could be pissed off for a long time:
1) Some minority might really care about the environmental impact of NOX.
2) A larger group, maybe a majority, may be really pissed when their formerly good performing and high mileage VW diesels are "fixed" to become lower performing and less economical. In any case, I don't think we know the impact until we know what the fix is.
If VW can't provide a fix that meets EPA standards while preserving decent performance and fuel economy, they might well be screwed to an even greater extent than GM. Interesting outcome if that proves true. GM was actually willing to kill people to save a couple cents on ignition switches. VW was willing to pollute cities and increase things like repiratory diseases in order to sell more cars. Both are terrible abuses; but (to me) the GM cover up seems just a bit worse.
Here's one of many possible scenarios. VW recalls the vehicles and they perform like sloths (since they're now continuously running in pollution test mode). Customers are pissed and sales tank. Someone comes out with a kit to bypass the fix. Millions are sold and VW TDI's become a cult item. Sales are back to normal in a year or two, as the company dedicates itself to making some decent new models.
Who knows?
One interesting detail is that GM was only fined around $35 million; mostly for delaying the recall after the information was known. VW faces fines a couple orders of magnitude larger than that -- the reports are around $7 billion.
FWIW, BP paid about $18 billion in fines and more in clean up. That company's stock dropped from around $55 a share before the spill to below $30, but recovered above $50 a share before dropping again due to the low price of oil. Even larger fines and compensation costs didn't kill the company.
One thing we do know is that the nice thing about being a bad-acting corporation these days is that you sometimes get all the benefits of being a very wealthy citizen, but aren't much subject to jail time, much less the death penalty. Just consequences paid by average folks and fines paid by investors.