Volkswagen diesel scandal may dent resale

Fallout from the VW engine scandal could trigger a short-term gain for new-car buyers, but the long-term impact is likely to be far less favourable in Australia.

Showroom prices are predicted to fall but resale values will also drop, says the man who heads research company Glass's Information Services.

"The Volkswagen brand will certainly take a hammering over the next few months and it will be interesting to see how VW reacts to this. I only just hope that it's a more positive reaction than when they had the problem with the DSG gearboxes a few years ago," says Glass's CEO Santo Amoddio.

Amoddio believes Australians are already reacting to news from Europe and the US about the emissions cheat, even before there is any real detail on the local impact.

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"This sort of issue creates doubt in the minds of new car buyers," he says. "I think it will have an impact on their car sales over the coming months. Any sort of new-car buyers' strike may result in discounting of prices in order to compensate for any fall in sales volumes."

He believes there will be deals, particularly on the Golf, to get people to recommit to the company.

"You would appreciate that if you're close to making a decision on a new car then any negative press creates uncertainty. Potential buyers will question how this is being resolved, what impact it will have on the reliability of the vehicles in question, and whether they can trust the brand."

The software fix to this problem is not a solution

Amoddio believes there could easily be a short-term retreat, as well as complaints from existing owners about the impact on their vehicles.

"The software fix to this problem is not a solution, as the vehicle's performance could be adversely affected by the software fix.

"And will any customer that has placed an order for new cars affected be able to cancel the order?" Glass's is not predicting any short-term fall in VW's second-hand values but admits "we will be carefully monitoring any impact on the market over the coming months".

But he warns that the same questions and doubt that have already hit new-car buyers will quickly influence the second-hand scene.

"I don't think it will have any immediate impact on used values, however it will also create similar doubt in the mind of used-car buyers," he says.

"If this doubt continues for more than a couple of months then we will start to see a negative impact on used-car values, especially if sellers start to drop prices in an attempt to sell. "Questions will arise as to has this vehicle had its software updated and, if so, what impact this will have on the car's performance."