Volkswagen (Eric Dufour/Bigstock.com)

Could the Volkswagen Group diesel-rigging scandal spell the end for the German car giant? At present, the omens do not look good.

While any level of dishonesty within a company is likely to damage its reputation, VW has been caught out as regards its environmental credentials – credentials that inspired great trust from the car-buying public.

VW customers and automotive commentators find it hard to believe that the installation of emissions 'defeat devices' in so many cars was not known about by members of the company's board.

And it is not just the VW brand affected: Audi, Skoda and Seat – all VW-owned – have also been affected by the scandal.

The firm's sales figures are already suffering, but the firm has other problems. US hearings have been followed by parliamentary hearings in this country, while police investigations are underway in Germany and Italy.

The European Investment Bank is to investigate whether loans made to VW on the basis of achieving climate targets may need to be repaid.

In Europe alone, 8.5m cars are to be recalled. This is a huge cost for any car maker – even one the size of VW.

The Wolfsburg-based company's financial outlook has been further weakened by its share price, which plunged when news of the scandal broke and continues to perform poorly.

Regulators are under scrutiny, too: how has VW cheated the emissions test so easily?

Some are also asking how the VW scandal will affect Germany's overall reputation for engineering excellence.

What is particularly striking is that VW is otherwise such a successful company – producing cars that are admired and loved around the world. The installation of a tiny piece of software now jeopardises the survival of the entire company – and to many seems so unnecessary.